Executive Briefings

Consumer Spending Starts Q4 With Solid Gain, Commerce Department Reports

U.S. consumer spending posted another solid gain in October and inflation continued to show signs of firming, buoying hopes of strong economic growth in the fourth quarter. The Commerce Department said personal consumption rose a seasonally adjusted 0.3 percent last month after a revised 0.7-percent jump in September.

Economists polled by Reuters had forecast consumer spending would rise 0.4 percent in October.

Reuters said households took advantage of rising incomes to boost savings to a seven-month high, but spending "remained sufficiently strong to support economic growth in the fourth quarter." The September increase was the second-largest monthly gain in two years.

"The economy continues to move ahead powered by the American consumer who has got the income to both spend and save for a rainy day," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.

Incomes rose 0.6 percent in October, the best monthly gain since April, after a 0.4 percent gain in September.

“Conditions for consumers remain solid,” Gus Faucher, economist at PNC Financial Services Group, told The Wall Street Journal. “With more jobs and higher wages, households have more money in their pockets to purchase goods and services.”

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Economists polled by Reuters had forecast consumer spending would rise 0.4 percent in October.

Reuters said households took advantage of rising incomes to boost savings to a seven-month high, but spending "remained sufficiently strong to support economic growth in the fourth quarter." The September increase was the second-largest monthly gain in two years.

"The economy continues to move ahead powered by the American consumer who has got the income to both spend and save for a rainy day," Chris Rupkey, chief economist at MUFG Union Bank in New York, told Reuters.

Incomes rose 0.6 percent in October, the best monthly gain since April, after a 0.4 percent gain in September.

“Conditions for consumers remain solid,” Gus Faucher, economist at PNC Financial Services Group, told The Wall Street Journal. “With more jobs and higher wages, households have more money in their pockets to purchase goods and services.”

Read Full Article