The U.S. recovery braked sharply at the start of the year.
Consumer spending failed to rise in May, breaking a string of 10 straight months of gains, as households struggled with rising prices and automakers could not deliver the models Americans wanted.
When adjusted for inflation, spending slipped 0.1%, the Commerce Department says.
It was the second consecutive monthly drop.
The report, which confirmed that underlying inflation had quickened, suggests consumer spending would offer little support to the economy in the second quarter. In the first three months of the year, it advanced at a modest 2.2% annual rate, held back by the weak U.S. labor market.
"This is in line with our expectation for very weak consumer spending for the second quarter," says Yelena Shulyatyeva, an economist at BNP Paribas in New York. "This is the result of weak auto spending as manufacturers have less inventory and prices are higher for available models."
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