In this Saturday, June 6, 2015 photo, a customer at left pays for produce with cash to a worker at a stand at the Atlanta Farmers Market. The Commerce Department releases personal income and spending for July on Friday, Aug. 28, 2015. (AP Photo/David Goldman)

In this Saturday, June 6, 2015 photo, a customer at left pays for produce with cash to a worker at a stand at the Atlanta Farmers Market. The Commerce Department releases personal income and spending for July on Friday, Aug. 28, 2015. (AP Photo/David ... Goldman) (The Associated Press)

US consumer spending expected to show stronger gain in July

Economic Indicators Associated Press

The Commerce Department releases its July report on consumer spending, which accounts for 70 percent of economic activity.

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SPENDING UP: The expectation is that spending rose 0.4 percent in July, according to a survey of economists by data firm FactSet. These analysts forecast that incomes also grew 0.4 percent in July.

JUNE SLOWDOWN: In June, consumer spending rose by just 0.2 percent, the smallest gain in four months, as shoppers cut back on purchases of cars and other big-ticket items.

The overall economy, as measured by the gross domestic product, grew at a healthy 3.7 percent pace in the April-June quarter, the government reported Thursday, in a sharp upward revision of an earlier estimate of a more moderate gain of 2.3 percent.

Part of the newfound strength came from an upward revision in consumer spending, which grew at a 3.1 percent rate in the spring, up sharply from a gain of 1.8 percent in the first quarter, when a harsh winter kept shoppers away from stores.

Economists believe that growth will remain solid in the current July-September period. They believe consumer spending will be supported by further strong gains in employment. The jobless rate in July was at a seven-year low of 5.3 percent. More people working supports continued gains in consumer spending.