Bloomberg reports consumer spending slowed in July as the impact of this spring’s economic stimulus plan faded and an increase in inflation eroded purchasing power.

The Commerce Department said consumer spending rose just 0.2% which was inline with economists’ expectations, but lower than the 0.6% increase in June.

The department also released its price gauge report which is tied to spending patterns. That number jumped 4.5% on a year-over-year basis which was the largest annual gain in 17 years.

Core PCE, less food and energy, increased 0.3% for a second month. On an annual basis, that figure rose 2.4%, the most since February of 2007.

For more context on the economy, see yesterday’s Five Things You Need To Know by Professor Depew.

From the Bull Pen: Bulls can look to TJX (TJX) for an upside play and might consider waiting for the stock to pull back to $34 before initiating a position.

From the Bear Cave: We’ve talked about a downside play in Tiffany (TIF). Bears will be watching next week for its behavior at the $45 level.


Have a great holiday!