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Consumer Spending Surges As Americans Finally Tap Gas Savings

The money Americans are saving at the pump is finally starting to burn a hole in their pockets.
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/ Source: Associated Press

U.S. consumer spending surged in May with the biggest monthly increase in nearly six years - a sign of stronger economic growth ahead.

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The Commerce Department said Thursday that consumer spending rose 0.9 percent last month, up from a revised 0.1 percent increase in April. May spending registered the biggest gain since August 2009, when the government's "Cash for Clunkers" program fueled auto-buying.

The increased spending last month suggests that the positive impacts from solid hiring and cheaper gasoline are starting to ripple through the economy.

"We are finally seeing signs of consumers beginning to spend the gasoline savings they have been sitting on since the start of this year," said Paul Ashworth, chief U.S. economist at Capital Economics.