According to The Wall Street Journal, U.S. consumers have boosted the economy in July, providing a counterweight to a weak manufacturing sector and sluggish growth. The Commerce Department said that retails sales grew 0.7% in July from June. After sales figures were revealed, U.S. stocks stabilized.
“As consumers continue to see income gains and positive job gains...that’s obviously good news for growth and should keep us on a positive track for a while,” said Ben Ayers, a senior economist at Nationwide.
Over two-thirds of U.S. economic output comes from consumer spending while industrial output drops and the manufacturing sector slows. Trade uncertainty has contributed to a weakened global economy. The U.S. economy has slowed down from these developments, but still grew at a 2.1% annual rate due to consumer spending numbers.
Another strong point in the U.S. economy is the labor market. Unemployment was at 3.7% in July, wages are going up, and more jobs are becoming available. The flourishing labor market leads to higher spending by consumers.
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