Consumer spending rises in the U.S.

Consumer spending rose less than expected in May, likely held back by weak health care spending, which could prompt economists to temper their growth estimates.

The Commerce Department said Thursday consumer spending increased 0.2 percent after being flat in April. Spending, which accounts for more than two-thirds of U.S. economic activity, had been forecast to rise 0.4 percent.

When adjusted for inflation, consumer spending fell for a second straight month, suggesting spending this quarter could struggle to regain momentum after growing at its slowest pace in nearly five years in the first quarter.

Spending in May probably was constrained by weak health care spending as outlays on services barely rose for a second month. Spending on automobiles surged, accounting for more than half of the rise in durable goods outlays.

Separately, the Labor Department said new applications for unemployment benefits slipped 2,000 to a seasonally adjusted 312,000 for the week ended June 21. The declining claims suggest a recent streak of payroll job gains above 200,000 per month is likely to be sustained.