MarketWatch: Worst inflation in 27 years trumps tax rebates

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Worst inflation in 27 years trumps tax rebates
Real spending falls 0.2% in June as incomes rise 0.1%

By Rex Nutting, MarketWatch


WASHINGTON (MarketWatch) -- The windfall of cash from Washington got eaten up in June by the worst inflation in 27 years, Commerce Department data showed Monday.

Nominal spending grew 0.6% on the month, but the increase was all due to higher prices, which spiked 0.8% -- the most for a month since 1981.

Adjusted for inflation, June's so-called real spending fell 0.2%, the first decline since February. Real consumer spending is up just 1.2% from a year ago.

The impact of the tax rebates on personal incomes was reduced in June: After getting $48.1 billion from the government in May, individuals received $27.9 billion.

Personal incomes rose 0.1% after a 1.8% surge in May.

Economists surveyed by MarketWatch had been looking for nominal spending to rise 0.5% and incomes to fall 0.1%. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/worst-inflation-27-years-trumps/story.aspx?guid=%7B5A153311%2D54CC%2D4AEA%2DA26D%2D09F2B841A4AE%7D