Report: Sept. Consumer Spending, Incomes Up
Consumer spending in the U.S. climbed more than forecast in September, a sign the biggest part of the economy was picking up as the quarter drew to a close.
Bloomberg reported that household purchases, which account for about 70% of gross domestic product, rose 0.8%, the most since February, after advancing 0.5% in August, a Commerce Department report showed today (Oct. 29) in Washington. Incomes climbed 0.4%, the most since March.
The acceleration in spending may help the world’s largest economy overcome a slowdown in exports and business investment as global growth slackens and concern mounts about the so-called fiscal cliff. At the same time, a drop in saving to finance purchases indicates bigger gains in employment are required to provide the income needed to sustain spending.
“The strength in September gives consumer spending a good lift for the fourth quarter,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn. “The housing market seems to have turned. Consumers are clearly feeling better and are going out and spending a bit more.”
Equity markets in the U.S. were closed today as Hurricane Sandy barreled toward New York City. Risks posed by the storm, expected to come ashore late today in southern New Jersey and potentially affect 60 million people, were deemed too great to require workers to travel.