The Globe and Mail reports in its Saturday edition that U.S. consumer spending rose by 0.5 per cent in July, indicating a strong start to the third quarter and potentially reducing the need for a half-percentage-point interest-rate cut from the Federal Reserve next month. A Reuters dispatch to The Globe reports that although the unemployment rate rose to 4.3 per cent, the economy remains relatively stable. Fed chairman Jerome Powell hinted at an imminent rate cut due to concerns over the labour market, but some experts argue the current level of spending growth does not suggest an impending recession. Consumer spending, which makes up more than two-thirds of U.S. economic activity, has been a driving force behind the recent gross-domestic-product growth. The increase in spending was across both goods and services, with outlays on motor vehicles and parts leading the charge. Consumers also spent more on housing and utilities, food and beverages, recreation services as well as financial services. While the labour market momentum has slowed, it continues to generate decent wage growth that is helping to underpin spending. The slowdown in the labour market is mostly driven by a step down in hiring rather than layoffs.