Consumer spending is sluggish in June
It appears that the rising price of oil is not only impacting gasoline prices, but the inflationary pressures of the increasing cost of petroleum is finally bubbling up to the consumer level in the form of the many products and services which are made or made possible by natural gas and oil.
Source: AP
Excerpts:
WASHINGTON - Consumer spending was weak for a fourth straight month in June as rising gasoline prices left Americans with little to spend on other items. A key measure of inflation rose at the fastest pace in more than a decade.
Consumer spending accounts for two-thirds of total economic growth and the slowdown in this area was a big factor in the slowing of the overall economy in the spring to a growth rate of just 2.5 percent, less than half the 5.6 percent pace of the first quarter.
Stagflation: The Federal Reserve is hoping to slow the economy enough to keep inflation under control. However, the new report showed the opposing forces facing the central bank. While consumer spending and the overall economy are slowing, inflation is getting worse.
