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Road to recovery

  • January retail sales pick up
    Americans rebounded from a weak holiday season and stepped up spending on retail goods in January. The latest government report on retail sales pointed to a slowly improving economy. Retail sales rose at a seasonally adjusted 0.
  • Jobs lost; hopes fade
    J.R. Childress is up before the sun, bustling about in the French colonial brick house he built.
  • Retail sales growth in China slips
    Chinese shoppers on their Lunar New Year holiday were less lavish than expected by Hong Kong jewelers, curbed spending on beauty brands and slowed spending at South Korean stores.
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Associated Press
Kim Miller shops for clothes in St. Louis. Consumer spending rose 0.4 percent in July, a pace experts think is weak.

Consumers spend a bit more

July’s gain of 0.4% is considered weak

– Americans are spending a little more this summer, but hardly enough to rejuvenate the weakening economy.

What is needed is a bigger boost in salaries and more jobs. Economists don’t see either coming this year, which is why the economy is likely to limp along.

Still, modest gains in spending were a welcome sign after a string of economic reports last week raised fears of the country slipping back into a recession.

“The consumer hasn’t taken the economy back into recession,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “The consumer is still moving forward but they are doing it at a very modest pace.”

Consumer spending rose 0.4 percent in July, with much of the strength coming from increased demand for autos, the Commerce Department reported Monday. It was the best showing since March, but it followed three lackluster months when spending was essentially flat.

Americans did earn a little more in July after seeing their incomes unchanged in June. Still, the 0.2 percent increase was mostly the result of small wage and salary gains that fell far below increases seen in more robust economic recoveries, economists said. And some of the gains came from a jump in Social Security payments.

Without job growth, consumers are not expected to spend much more. But the economy is growing too slowly to support sustained hiring and companies are waiting to see more demand from consumers. That leaves the economy in limbo.

Last week the government reported that the economy grew at an anemic 1.6 percent rate in the April-to-June quarter and sales of previously occupied homes fell last month to the lowest level in 15 years. A private-sector report also said Americans bought new homes at the weakest pace in nearly half a century.