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Business

Consumer spending rebounds in May

Consumer spending rose 0.3 percent in May after a decline in April, the Commerce Department reported.

Toby Talbot/Associated Press/File 2013

Consumer spending rose 0.3 percent in May after a decline in April, the Commerce Department reported.

WASHINGTON — Consumer spending rebounded in May following the largest drop in more than three years, a sign the biggest part of the economy should underpin growth this quarter.

Household purchases, which account for about 70 percent of the economy, rose 0.3 percent after a 0.3 percent decline the previous month that was the biggest since September 2009, Commerce Department figures showed. Incomes advanced 0.5 percent, more than projected.

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The report may help ease concern about the outlook for the economic expansion after data Wednesday showed household purchases rose at a slower pace than previously estimated in the first quarter. Rising home prices and an improving job market, combined with faster income gains, may help to accelerate spending in the last six months of 2013.

‘‘We’re going to have a healthy second half,’’ Brian Jones, a senior US economist for Societe Generale in New York, said before the report.

Jobless claims decreased by 9,000 to 346,000 in the week ended June 22 from a revised 355,000 the prior period, a Labor Department report showed. Smaller reductions in head counts indicate employers are confident enough that demand will be sustained as the housing market improves and consumers become more optimistic.

Gross domestic product grew at a 1.8 percent annualized rate from January through March, down from a prior reading of 2.4 percent, Commerce Department data showed Wednesday.

Consumer purchases were trimmed to a 2.6 percent advance — still the fastest in two years — from the 3.4 percent gain estimated last month as Americans cut back on services from vacations to legal advice.

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The savings rate increased to 3.2 percent from 3 percent. Wages and salaries climbed 0.3 percent.

Adjusting consumer spending for inflation, purchases rose 0.2 percent in May after a 0.1 percent decrease in the previous month, Thursday’s report showed.

The Commerce Department’s price index tied to spending, the gauge tracked by Federal Reserve policy makers, increased 0.1 percent. The so-called core price measure, which excludes food and fuel, also rose 0.1 percent from the prior month and was up 1.1 percent from May 2012, matching the record low.

One area of spending that remains a bright spot is automobiles. Cars and light trucks sold at a 15.2 million annualized rate in May, putting 2013 on course to be the best year for the industry since 2007, data from automakers show.

Americans are also buying property. New home sales jumped in May to a five-year high, data showed this week.

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