(Bloomberg) – Household spending climbed in May by the most in almost six years, buoyed by gains in incomes as the U.S. job market strengthened.
Purchases increased 0.9 percent, the biggest gain since August 2009, after rising 0.1 percent in April, Commerce Department figures showed Thursday in Washington. The median forecast of 75 economists in a Bloomberg survey called for a 0.7 percent advance. Incomes rose 0.5 percent for a second month.
Consumers may finally be putting savings from lower gas prices to work after holding back earlier this year. Higher stock and home prices that are lifting household wealth, in addition to increases in employment, may help Americans feel secure enough to boost spending.
“We’re clearly seeing a nice acceleration on the part of the consumer,” said Jacob Oubina, a New-York based senior U.S. economist at RBC Capital Markets LLC, who correctly forecast the gain in spending. “It comes down to job growth and better income prospects. It’s going to be a decisive rebound this quarter.”