Americans are spending a little more this summer, but hardly is it enough to rejuvenate the sluggish US economy. What is needed is a bigger boost in salaries and more job openings. More and more Americans are landing themselves in debt and are seeking debt help options. Modest gains in spending are a welcome sign after a string of economic reports that raised fears of the country slipping back into recession once again.
The US stock future saw a decline in the stock market rate earlier on Monday morning that is on the 30th of August. Data reveals that US consumers have been spending more since July although their income growth remained slothful. The stocks fell in trading after Monday and showed more signs of slow economic growth. The Dow Jones industrial average lost ground and closed with a loss of 141 points. All the other indexes also fell by 1%. The prices of bonds rose sending the interest rates to a sky high level as more money moved back into the Treasury.
The latest cause for worry on the US economy came in report early in the morning of 3oth August saying that personal income rose less than expected in August. This news added to the series of discouraging economic signs which showed that the US economy could slow down again in the second half of the year. The personal income report by an organization did little to ease out the nervousness about the course of the economy. The report did show that consumer spending was up in July but without consistent growth in income, any increase in spending is likely to be temporary.
Investors have been focusing on the employment data as a way of foretelling where the US economy is going. A sign of a slowdown in growth has weighed down the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession.
The investors have been hitting in that the weaker economic returns will turn to smaller stock earnings than previously thought. This, in turn has helped drive US stocks to lower level to match the diminished expectations. The Dow fell 140.92, or 1.4 percent, to close at 10,009.73. The Standard & Poor's 500 index fell 15.67, or 1.5 percent, to 1,048.92, while the NASDAQ composite index fell 33.66, or 1.6 percent, to 2,119.97.
The stocks have been largely moving on the major US economic reports and lesser on individual news during the pat months. Until the Labor Department's monthly employment report isnt out, the investors are looking for signs earlier this week about the jobs market. The Commerce Department announced on 30th of August that personal income rose 0.2% last month, falling below economist's forecast of 0.3% growth.