03 August 2016 at 1:23 GMT
US consumer spending rose more than expected in June as households bought goods and services, suggesting strength that appeared to be sustained early in the third quarter with auto sales surging to an eight-month high in July, writes Lucia Mutikani. But despite healthy consumer spending, Tuesday's report from the Commerce Department showed inflation still muted. Economists say this, together with weak business investment and the second quarter's anaemic economic growth pace, may encourage a cautious Federal Reserve to keep interest rates at current low levels for a while.
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