American consumers increased their spending by 1% in June — a dose of energy for an economy that is quickly rebounding from the pandemic recession but is facing new risks led by the delta variant of the coronavirus, the Associated Press reported. At the same time, a key inflation barometer that is closely followed by the Federal Reserve surged 3.5% last month from a year earlier. That was the fastest such 12-month surge since 1991. June’s solid increase in consumer spending provided further evidence that consumers are driving a strengthening recovery from the pandemic recession. Friday’s report from the Commerce Department also showed that personal incomes, which provide the fuel for spending, edged up 0.1% in June after two months of big declines, reflecting the waning of several government support programs. In its report on consumer spending in June, the government said that goods purchases rose a modest 0.5%, while spending on services increased a stronger 1.2%. As vaccinations have increased and the economy has increasingly reopened, more Americans have been shifting their spending away from the physical goods that many purchased while hunkered down at home to to spending on services, from haircuts to airline tickets to restaurant meals.
