140626111031-piggy-bank-620xaAfter accounting for mildly higher prices, consumer spending has actually fallen for two months in a row. In May, Americans cut back on eating out, going to the movies, and buying clothes. They spent less on necessities like groceries and utilities. Meanwhile, health care spending has fallen considerably since the beginning of the year, and has now been flat for two months in a row.
The few exceptions to these trends include spending on housing, gasoline and cars, which are rising.
“Consumers bought more homes and cars, saved a little more for a rainy day, and …that was about it. Not much left for anything else,” said Jennifer Lee, senior U.S. economist with BMO Capital Markets.