Consumer spending jumped in June as Americans continued to absorb stubbornly high prices on groceries, gasoline and other basic needs. But the mood of these shoppers remained quite gloomy, potentially signaling that a broad pullback could be on the horizon, the Washington Post reported. Two data points released Friday — in a week brimming with economic markers — illustrate how the behavior of American consumers has neared a tipping point heading into the second half of the year. Overall consumer spending climbed a healthy 1.1 percent in June, the Bureau of Economic Analysis reported Friday, a significant uptick from the 0.2 percent recorded in May. That increase came during a month when gas prices surged past $5 per gallon in many parts of the country and the consumer sentiment index — as measured by the University of Michigan — reached a record low of 50. As gas prices receded somewhat in July, consumer sentiment ticked up to 51.5, a marginal improvement but still the index’s second-lowest level. Whether this is the beginning of a slow rebound or a minuscule blip is unclear. When consumer sentiment is low, many Americans can be compelled to pull back on spending. That is the type of behavior that can pull an economy into a recession. And consumer sentiment hasn’t been this low in recent history, even during recessions.
