US consumers spend weakly
Source: Agencies |
December 24, 2011, Saturday
|
Print Edition
Print Edition
AMERICAN consumers spent at a lackluster rate in November as their incomes barely grew, suggesting that United States households may struggle to sustain their spending into 2012.
Consumer spending rose just 0.1 percent in November, matching the modest October increase, the US Commerce Department reported yesterday. Incomes also rose 0.1 percent. That was the weakest showing since a 0.1 percent decline in August.
Both the spending and income gains fell below expectations. Economists have said that solid increases in spending could boost economic growth in the final three months of what has been a disappointing year.
Paul Ashworth, chief US economist at Capital Economics, called the consumer spending figure disappointing. He said it would probably mean lower economic growth than had been expected.
Rather than grow at an annual rate of up to 3 percent in the October-December quarter, the economy will likely expand at a rate of about 2.5 percent this quarter, Ashworth said. That would still be an improvement from the 1.8 percent growth in the July-September period.
While the economy remains vulnerable to threats, particularly a recession in Europe, the job market has improved, lifting hopes for next year.
The government said this week that filings for jobless benefits fell by 4,000 last week to 364,000. It was the third straight weekly drop. And it pushed applications to the lowest level since April 2008, amid the Great Recession.
The weakness in incomes reflected a decline in wages and salaries, the biggest component of incomes, in November.
Consumer spending rose just 0.1 percent in November, matching the modest October increase, the US Commerce Department reported yesterday. Incomes also rose 0.1 percent. That was the weakest showing since a 0.1 percent decline in August.
Both the spending and income gains fell below expectations. Economists have said that solid increases in spending could boost economic growth in the final three months of what has been a disappointing year.
Paul Ashworth, chief US economist at Capital Economics, called the consumer spending figure disappointing. He said it would probably mean lower economic growth than had been expected.
Rather than grow at an annual rate of up to 3 percent in the October-December quarter, the economy will likely expand at a rate of about 2.5 percent this quarter, Ashworth said. That would still be an improvement from the 1.8 percent growth in the July-September period.
While the economy remains vulnerable to threats, particularly a recession in Europe, the job market has improved, lifting hopes for next year.
The government said this week that filings for jobless benefits fell by 4,000 last week to 364,000. It was the third straight weekly drop. And it pushed applications to the lowest level since April 2008, amid the Great Recession.
The weakness in incomes reflected a decline in wages and salaries, the biggest component of incomes, in November.
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