BLBG:Consumer Spending in U.S. Increases 0.8% as Incomes Climb
Consumer spending in the U.S. 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 today in Washington. The median estimate in a Bloomberg survey of 71 economists called for a 0.6 percent rise. Incomes rose 0.4 percent, the most since March.
The economy expanded 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 survey ranged from gains of 0.3 percent to 0.8 percent.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
