Washington, D.C. -- Household purchases unexpectedly fell 0.1% in July, after rising 0.4% the prior month, according to figures released by the Commerce Department. It was the first drop in six months. On a more positive note, confidence among households hit a seven-year high in August, according to the Thomson Reuters/University of Michigan's consumer sentiment index.
The spending decline in July was broad-based, but was weighed down by a decline in automobile purchases and a weather-related drop in demand for utilities, prompted by cooler-than-normal weather in much of the country.
The Thomson Reuters/University of Michigan's index increased to 82.5 in August from 81.8 in July. It was the highest level since July 2007.