The East Side Lenders blog shares an article about the state of American spending in today’s economy

NEW YORK (CNNMoney) — After holding back the month before, American consumers spent their hard-earned money a bit more freely in July.

Personal spending rose $88.4 billion, or 0.8% in July, after falling 0.1% in June, the Commerce Department reported Monday.

The data was seen as slightly encouraging news after other recent reports have shown weakness in the U.S. economy. Consumer spending accounts for roughly 70% of U.S. economic activity, but so far, it has recovered sluggishly from the financial crisis.

Against that backdrop, economists immediately called Monday’s data “encouraging,” “decent” and “solid,” and said it makes the odds of a double-dip recession less likely.

Paul Dales, senior economist with Capital Economics, raised his outlook for third-quarter economic growth to 2.5% after the report was released, up from his previous forecast of 1.5% growth.

But he was also quick to caution that July spending still just one month of data, and does not yet include the impact of August’s stock-market plunge, dismal economic headlines and Hurricane Irene.

“It is possible, and probably likely, that the August data will be weaker,” he said.

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