Consumer spending, a key driver of the U.S. economy, grew modestly in August amid the protracted trade war with China and slowing of the global economy.
Data from the Commerce Department released Friday showed American household spending inched up 0.1%, or $20.1 billion, last month, the smallest increase in six months.
While consumer spending continued to grow, the latest figure was a marked shift from July, when spending by U.S. households spiked 0.5%.
Personal income, however, grew 0.4% in August, and the personal saving rate — defined as personal saving as a percentage of disposable personal income — was 8.1%, indicating Americans are saving more even as the economy continues to grow.
Consumer confidence also remains high, though it slipped this month in part due to the ongoing trade tensions with China. The latest round of tariffs could for the first time hit Americans in their pocketbooks as the 15% levies target a wide variety of consumer goods, including apparel, footwear, and toys. The first batch of duties went into effect Sept. 1, and a second round is expected Dec. 15.
The U.S. economy, however, is in its 11th year of expansion, and gross domestic product grew at an annualized rate of 2% in the second quarter, driven in part by consumer spending. Some economists, however, warn the country could be headed toward an economic slowdown, a concern that was amplified last month when the bond market flashed a warning sign about a possible recession.
President Trump, however, has largely rebuffed any suggestions the country could face an economic downturn and has instead blamed the Federal Reserve for holding back economic growth. The Fed last week, however, cut interest rates for the second consecutive time.
[Read more: Wilbur Ross: Liberal media ‘very desperately’ trying to spark a recession]
