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A Commerce Department report last week showed that consumers are more frugal. They spent no more in June than they did in May, while their incomes rose at the fastest pace in three months. The flat pace of spending was likely because hiring has been weak and confidence low. Employers added 163,000 jobs in July, the most in five months. But hiring for most of this year hasn't been enough to lower the unemployment rate. The rate ticked up to 8.3 percent in July from 8.2 percent in June. Consumer confidence increased in July for the first time in five months, the Conference Board said. But it remains well below healthy levels. The economy is growing too slowly to boost confidence or hiring. It expanded at a 1.5 percent annual pace in the April-June quarter, down from 1.9 percent in the first quarter and 4.1 percent in the final three months of 2011. Unless job growth picks up, consumer spending could weaken more and drag down economic growth further. The Federal Reserve's borrowing report covers auto loans, student loans and credit cards. It excludes mortgages, home equity loans and other loans tied to real estate.
[Associated
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