US Consumer Spending Stalls

Posted June 27th, 2011 at 12:00 pm (UTC-5)
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U.S. consumer spending was unchanged in May, after 10 months of gains.

Monday's report from the Commerce Department also shows inflation rose a bit during the month.

Economists watch consumer spending carefully because consumer demand drives about 70 percent of U.S. economic activity.

Experts say consumer spending stalled in May because rising costs of food and fuel reduced the amount of money families could spend on other items.

Gasoline prices rose to around $1 a liter in the United States, but recent declining oil costs may soon cut that to 90 cents a liter .

That could help increase consumer spending and ease concerns about inflation.