Consumer spending in US climbs
Source: Bloomberg News |
October 30, 2012, Tuesday
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Print Edition
Print Edition
CONSUMER spending in the US climbed more than forecast in September as incomes grew, a sign the biggest part of the economy was picking up as the quarter drew to a close.
Household purchases, which account for about 70 percent of the economy, rose 0.8 percent, the most since February, after a 0.5 percent gain the prior month, a Commerce Department report showed yesterday in Washington.
The median estimate in a Bloomberg News survey of 71 economists called for a 0.6 percent rise. Incomes rose 0.4 percent, the most since March.
The economy grew at a 2 percent annual pace in the third quarter, helped by a pickup in household purchases as an improving housing market boosted confidence. At the same time, growth remains limited and unemployment elevated, Federal Reserve policy makers said last week, one reason they maintained their plan to buy bonds and keep interest rates low.
"We have some positive momentum that we could gradually build on over time," Scott Brown, chief economist at Raymond James & Associates Inc in St Petersburg, Florida, said before the report. "Household balance sheets are improving. There's some pent-up demand, especially for motor vehicles. The expansion will continue."
Projections for spending in the Bloomberg News survey ranged from gains of 0.3 percent to 0.8 percent.
The saving rate fell to 3.3 percent, the lowest since November, from 3.7 percent. Wages and salaries added 0.3 percent after rising 0.1 percent in August.
Disposable income, or the money left over after taxes, was little changed in September after falling 0.3 percent after adjusting for inflation.
Adjusting consumer spending for inflation, which renders the figures used to calculate gross domestic product, purchases rose 0.4 percent after a 0.1 percent increase in the previous month, the report showed.
Price-adjusted spending on durable goods, including automobiles, rose 1.3 percent after a 1.5 percent gain. Buying of non-durable goods, which include gasoline, rose 0.5 percent and services gained 0.2 percent.
The results shed more light on how household spending was faring at the time of the hand-off to the final quarter of 2012.
GDP rose at a 2 percent annual rate from July to September, up from a 1.3 percent pace in the prior quarter, Commerce Department data showed last week.
Household purchases, which account for about 70 percent of the economy, rose 0.8 percent, the most since February, after a 0.5 percent gain the prior month, a Commerce Department report showed yesterday in Washington.
The median estimate in a Bloomberg News survey of 71 economists called for a 0.6 percent rise. Incomes rose 0.4 percent, the most since March.
The economy grew at a 2 percent annual pace in the third quarter, helped by a pickup in household purchases as an improving housing market boosted confidence. At the same time, growth remains limited and unemployment elevated, Federal Reserve policy makers said last week, one reason they maintained their plan to buy bonds and keep interest rates low.
"We have some positive momentum that we could gradually build on over time," Scott Brown, chief economist at Raymond James & Associates Inc in St Petersburg, Florida, said before the report. "Household balance sheets are improving. There's some pent-up demand, especially for motor vehicles. The expansion will continue."
Projections for spending in the Bloomberg News survey ranged from gains of 0.3 percent to 0.8 percent.
The saving rate fell to 3.3 percent, the lowest since November, from 3.7 percent. Wages and salaries added 0.3 percent after rising 0.1 percent in August.
Disposable income, or the money left over after taxes, was little changed in September after falling 0.3 percent after adjusting for inflation.
Adjusting consumer spending for inflation, which renders the figures used to calculate gross domestic product, purchases rose 0.4 percent after a 0.1 percent increase in the previous month, the report showed.
Price-adjusted spending on durable goods, including automobiles, rose 1.3 percent after a 1.5 percent gain. Buying of non-durable goods, which include gasoline, rose 0.5 percent and services gained 0.2 percent.
The results shed more light on how household spending was faring at the time of the hand-off to the final quarter of 2012.
GDP rose at a 2 percent annual rate from July to September, up from a 1.3 percent pace in the prior quarter, Commerce Department data showed last week.
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