June 26, 2011 (Bloomberg) -- Consumer spending probably climbed at the slowest pace in almost a year and manufacturing cooled as dimmer job prospects and elevated commodity costs weighed on the U.S. expansion, economists said reports this week will show.
Purchases rose 0.1 percent in May, the smallest gain since June 2010, according to the median estimate of 63 economists in a Bloomberg News survey before a Commerce Department figures tomorrow. The disaster in Japan also held back American factories this month, a survey of purchasing managers may show.
The highest gasoline prices since 2008 and unemployment hovering around 9 percent caused households to pare spending, which may temper demand at factories already contending with higher input expenses and supply chain disruptions. The recent drop in fuel costs bolsters Federal Reserve Chairmen Ben S. Bernanke’s prediction that the slowdown will be temporary.
“We’re seeing a deterioration in the labor market combined with still-high gasoline prices eating into discretionary spending,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “Probably, the worst of the Japanese supply chain disruptions are behind us.”