Wall Street Today | US Consumer Spending Rose at Weakest Pace in a Year Last Quarter

Personal consumption, the main driver of the US economy, rose an annualized 0.8% in the April-to-June period, according to the third estimate of gross domestic product from the US Bureau of Economic Analysis. That compared with 1.7% in the previous estimate, marking the weakest advance over a year.

Overall GDP rose at an unrevised 2.1% rate during the period. Stronger business fixed investment helped offset the slowdown in consumer spending, advancing at a 7.4% pace versus the reported 6.1% estimate.

The U.S. economy grew at a solid 2.1% annual pace in the second quarter, revised figures show, but consumer spending was weaker than originally reported. The increase in household spending was chopped to 0.8% from a prior estimate of 1.7%. Consumer spending is the main engine of the economy.

Yet more recent evidence suggests consumer spending rebounded in the third quarter, as did the broader economy. GDP is forecast to rise 4% or more in the third quarter, from July to September. The second-quarter estimate was 2.1%.

US benchmark crude fell nearly $2 after surging to $95 a barrel before falling back. While dwindling oil inventories at Cushing, Oklahoma — the delivery point for US futures — have sent key price gauges surging, the rally hit technical resistance with the 14-day relative strength index signaling a correction.

West Texas Intermediate has rallied about 30% since the end of June and is approaching the biggest quarterly gain since June 2020, when prices gyrated in the early months of the pandemic. Brent has topped $97 in intraday trading this week.