U.S. consumers continued to see modest gains in income and spending in July, a trend that could help support used-vehicle demand.
Personal income increased $115.1 billion, or 0.4%, during the month, according to the U.S. Bureau of Economic Analysis. Disposable personal income rose 0.5%, while consumer spending increased 0.2%.
The increase in income was driven primarily by higher compensation, government social benefits and income from assets.
Consumers saved $712 billion in July, putting the personal saving rate at 3% of disposable income.
For used-car shoppers, the numbers suggest household finances are improving modestly, but many consumers are still spending most of their available income. That can make the monthly cost of a vehicle especially important, particularly for buyers already managing higher costs for housing, insurance and other necessities.
Income growth may provide some breathing room for buyers, but the relatively low savings rate indicates that affordability remains a significant consideration in the vehicle market
