WASHINGTON (8/5/08)--Consumer spending likely will be down for the rest of the year, a Credit Union National Association (CUNA) economist told Bloomberg Monday.
"Consumer spending still has tremendous headwinds and it will no longer be fueled by the tax rebates," said Bill Hampel, CUNA chief economist. "Consumer spending will be weak at least through the middle of the year."
The uplift from tax rebates is waning and likely caused consumer spending to slow in June, analysts said, adding that near-record gas prices and a declining labor market also hurt households.
A forecast by 67 economists surveyed by Bloomberg News indicated that the boost from rebates will fade during the second half of 2008. June saw a 0.4% increase in spending, following a 0.8% increase in May.
Confronted with falling home prices, $4-per-gallon gasoline, and rising job losses, Americans got only temporary relief from tax rebates issued as part of the federal government's stimulus, analysts said.
courtesy of cuna.org