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U.S. consumer spending rises; Income gain smallest in 15 months

WASHINGTON (Reuters) – U.S. De consumentenuitgaven stegen voor een zevende straksmaand in september, maar de inkomsten zijn de kleinste winst…

WASHINGTON (Reuters) – U.S. De consumentenuitgaven stegen voor een zevende straksmaand in september, maar de inkomsten zijn de kleinste winst in meer dan een jaar in de vorm van matige winstgroei, wat de huidige tempo van de uitgaven onwaarschijnlijk was.

FILE PHOTO – A family stores at the Wal-Mart Supercenter in Springdale, Arkansas June 4, 201

5. REUTERS / Rick Wilking / File Photo

The Commerce Department said on Monday, spending spending, which accounts for more than two- Thirds of US economic activity, increased 0.4 percent last month as households bought more motor vehicles and spent more on health care.

Data for August was revised up to show spending advancing 0.5 percent instead of the previously reported 0.3 percent gain.

Economists polled by Reuters had forecast consumer spending increasing 0.4 percent in September. When adjusted for inflation, consumer spending rose 0.3 percent. The so-called real consumer spending climbed 0.4 percent in August.

The data was included in last Friday’s third quarter gross domestic product report, which showed consumer spending accelerating at a 4.0 percent annualized rate, the fastest in almost four years.

The economy grew at a 3.5 percent rate in the third quarter, a slowdown from the April-June period’s robust 4.2 percent pace.

Prices of U.S. Treasuries were trading lower on Monday while U.S. stock index futures were higher. The dollar .DXY was slightly stronger against a basket of currencies.

SAVINGS FALL

September’s rise in real consumer spending sets it on a solid growth path heading into the fourth quarter.

But the momentum is likely to slow. Personal income rose 0.2 percent in September, the smallest increase since June 2017, after gaining 0.4 percent in August. Wages rose 0.2 percent after jumping 0.5 percent in August.

Wage growth remains gradual despite the unemployment rate being close to a 49-year low of 3.7 percent. The saving rate fell to $ 975.7 billion last month, the lowest level since December 2017, from $ 1.0 trillion in August.

The moderation in income and savings comes amid signs that the stimulus from the Trump administration’s $ 1.5 trillion tax cut package has peaked. In addition, the stock market sell-off is seen eroding household wealth.

In September, spending on goods surged 0.6 percent. Consumers also spent more on sporting goods. Outlays on services gained 0.3 percent, with spending on health care offsetting a decline in spending at restaurants and on accommodation.

Prices continued to rise steadily in September. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2 percent after being flat in August.

That left the year-on-year increase in the core PCE price index at 2.0 percent for a fifth straight month.

The core PCE index is the Federal Reserve’s preferred inflation measure. It hit the U.S. Central Bank’s 2 percent inflation target in March for the first time since April 2012.

The Fed is expected to raise interest rates again in December despite tightening financial market conditions brought about by the stock market drop and a rise in U.S. Treasury yields. Den centralbank hevede priserne i september for den tredje gang i år og fjernet en henvisning til pengepolitikken, der var “akkumulerende” fra dets politiske erklæring.

Reporting by Lucia Mutikani; Editing by Paul Simao

Our Standards: The Thomson Reuters Trust Principles.

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