Consumer spending up modestly in May

U.S. consumers boosted their spending only modestly in May, a disappointment to economists who said the weaker-than-expected gain will likely mean a lesser economic rebound in the April-June quarter than many had envisioned. Spending rose just 0.2 percent last month after no gain in April, the Commerce Department said. The two months followed a robust spending surge of 0.8 percent in March. Income rose a solid 0.4 percent in May after a 0.3 percent April gain. Last month’s 0.2 percent gain in spending was just half the increase that analysts had been expecting. Some said that unless June brings a big increase, spending may not provide as much support to the economy in the second half of the year as they had been expecting.

Initial jobless claims slipped last week

The number of Americans seeking unemployment benefits declined last week, the latest evidence that a sharp economic slowdown earlier this year hasn’t caused employers to cut jobs. Weekly unemployment benefit applications fell 2,000 to a seasonally adjusted 312,000, the Labor Department said. The four-week average, a less volatile measure, rose 2,000 to 314,000. The average has fallen 9 percent since the beginning of this year. Applications are a proxy for layoffs, so the declines indicate that companies are cutting fewer jobs. The figures come a day after the government said the economy shrank at a 2.9 percent annual rate in the first three months of the year, the worst reading since early 2009, when the U.S. was in the recession.

Michaels raises $472 million in IPO

Michaels Cos. has crafted its way back to the stock market, raising $472 million in an initial public offering. It priced 27.8 million shares at $17 each, at the low end of its predicted range. That suggests tepid demand for its stock, which is set to start trading Friday. It could raise up to $543 million if underwriters use their option to buy additional shares. Irving, Texas-based Michaels is the largest arts and crafts chain in North America by store count. Michaels has faced tough competition from discounters and online king

Average mortgage rates decline slightly

Average U.S. rates on fixed mortgages declined this week, hovering near historically low levels. Mortgage buyer Freddie Mac said the average rate for a 30-year loan eased to 4.14 percent from 4.17 percent last week. The average for the 15-year mortgage fell to 3.22 percent from 3.30 percent. Rising prices and higher interest rates beginning in mid-2013 have made homes less affordable for would-be buyers. Mortgage rates are about a quarter of a percentage point higher than they were at the same time last year.