Consumer spending up, but just a little

WASHINGTON - Americans spent a little more in May but not enough to speed along the economic recovery.

Consumer spending rose 0.2 percent last month after no change in April, the Commerce Department said Monday.

Incomes rose for the sixth time in seven months, boosting household finances and potentially providing fuel for greater future spending.

The increase in spending came mostly in services - much of that likely the result of Americans' using more electricity as temperatures rose. Money spent on goods declined.

Incomes rose 0.4 percent. The savings rate, or the percentage of income that was not spent, bumped up to 4 percent.

Consumers "are still not setting this economic recovery alight, but nor are they rolling over in the face of . . . high unemployment and lower [stock] prices," Paul Dales, an economist at Capital Economics, wrote in a note to clients.

More cautious spending by Americans is fueling debate over how much of a role government should play in stimulating the economy.

World leaders, including President Obama, pledged over the weekend to cut deficits in richer countries in half by 2013.

But as the appetite for federal stimulus fades in the United States, millions of Americans could lose unemployment benefits and health care subsidies. The Senate remains at an impasse over extensions, with growing deficits cited as a reason for blocking them.

Consumer spending is vital because it accounts for about 70 percent of economic activity.

The economy has grown for three straight quarters. Still, consumers are cautious, facing high unemployment, tight credit, and a slumping housing market. If consumption remains sluggish, the economy may not grow fast enough to generate jobs to bring down the 9.7 percent unemployment rate.