Consumer spending and personal incomes in the U.S. unexpectedly stagnated in June, showing a lack of jobs is hurting the biggest part of the economy. Purchases were unchanged after a 0.1 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. Incomes didn’t increase for the first time since September and the savings rate increased to the highest level in a year. Demand may take time to improve as the unemployment rate hovers near a 26-year high, shaking confidence in the economic recovery. At the same time, Federal Reserve Chairman Ben S. Bernanke yesterday said consumer spending, which accounts for about 70 percent of the economy, may “pick up” as wages increase. “Consumers are still hunkered down,” Ryan Sweet, a senior economist at Moody’s Economy.com Inc. in West Chester, Pennsylvania, said before the report. “The second half of this year we’re going to see slower spending.” The median estimate of 76 economists surveyed by Bloomberg News called for a 0.1 percent gain in spending. Projections ranged from a decrease of 0.3 percent to a 0.3 percent gain. The median estimate of economists surveyed called for a 0.2 percent advance in incomes. Wages and salaries in June fell 0.1 percent, the first drop since September. The savings rate increased to 6.4 percent last month, the highest level since June 2009, to $725.9 billion. Savings Rate Revised figures from the Commerce Department last week boosted personal income levels for each of the past three years, propelling the savings rate higher and signaling households are further along the process of repairing their finances. “We have a considerable way to go to achieve a full recovery in our economy,” Bernanke said yesterday in a speech to southern U.S. state lawmakers in Charleston, South Carolina. Still, “rising demand from households and businesses should help sustain growth,” and consumer spending “seems likely to pick up in coming quarters from its recent modest pace.” Confidence among U.S. consumers fell in July to the lowest level since November, figures from Thomson Reuters/University of Michigan showed last week. The group’s final sentiment index decreased to 67.8 from 76 in June. The index has averaged 84.5 over the past decade. Some U.S. companies say they’re seeing the effects of a slowdown in household purchases, even for necessities. SuperValu Inc., the operator of the Albertson’s grocery-store chain, said last week that fiscal first-quarter food sales fell compared with a year earlier and consumers purchased fewer items per basket. Food Sales “We see huge increases in coupon usage across our enterprise,” Chief Executive Officer Craig Herkert said on a conference call July 27. “We continue to see as you all know, massive unemployment but also underemployment and particularly in some of the big markets where we are, it’s certainly more challenged than in the country as a whole.” Consumer spending grew at a 1.6 percent annual pace in the second quarter of 2010, less than the 1.9 percent rate in the first three months of the year, a report from the Commerce Department last week showed. That same report showed the economy grew 2.4 percent from April through June.

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