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American Consumers Went on a July Spending Spree

Jupiterimages/Thinkstock(NEW YORK) -- Consumers did more than sweat during a particularly hot July. They spent more money than they did in the past five months. In fact, the spending increased 0.4 percent, the biggest boost since February.

What accounted for this rise in spending was a drop in gas prices that peaked last April.  However, prices at the pump have steadily risen over the past month.

Personal income also ticked up slightly last month, putting more Americans in a buying mood.

Since consumer spending accounts for 70 percent of economic activity, analysts expressed mild optimism that people might be starting to feel a little better about their financial situations.

However, Wall Street was unimpressed by the numbers, with the Dow Jones Industrial average falling more than 100 points as investors await Friday's speech by Federal Reserve Chairman Ben Bernanke about possibly taking more immediate and drastic action to boost the economy.

Copyright 2012 ABC News Radio

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