MYRTLE BEACH, SC (WMBF) – A report from the U.S. Department of Commerce released Monday showed consumer spending rose in July.
The 0.4 percent increase in spending was the best showing in four months.
The rise in consumer spending reflected a 1 percent increase in the purchase of durable goods in July. Half of that increase was due to car sales.
"Our sales have been real vibrant," commented Bobby Gale at Myrtle Beach Chrysler-Jeep. "July was our best month in two years."
Gale said he thinks customers seem more confident, and even those who are worried about the economy are still buying budget-priced used cars. Banks are also willing to lend again he says.
"Banks are out there," Gale said. "They've loosened up a lot. They're looking for business. They're out recruiting business."
However, economics professor Dr. Robert Salvino at Coastal Carolina University said July sales were artificially boosted by low financing rates and extra incentives including the year-end model clearance. He said the indicator is positive, but he believes it is a seasonal statistic influenced specifically by the automobile industry and not overall spending habits.
"It doesn't necessarily reflect a systematic change in the economy," Salvino said.
The report also showed personal income rose 0.2 percent in July after being unchanged in June. However, Salvino also pointed out that "real income" fell in July. That figure is adjusted for inflation and shows how much money people actually have to spend.
"In the same report, unfortunately to take away from that, was that real disposable personal income actually fell," Salvino said.
Although Salvino said the report seems positive on the surface, he said it should not be considered a reflection of a trend in spending.
It is too early to determine if the increase in spending will last for months to come, he said.