U.S. consumer spending recorded its biggest increase

U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles, but underlying inflation remained muted.

Households, however, dipped into their savings to fund purchases last month, pushing savings to their lowest level since 2008. Against the backdrop of lackluster wage growth, the drop in savings suggests that September’s robust pace of consumer spending is probably unsustainable.

“Relying on consumer savings to move the economy forward is not going to last for long,” said Chris Rupkey, chief economist at MUFG in New York.

The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 1.0 percent last month after an unrevised 0.1 percent gain in August. The increase, which also included a boost from higher household spending on utilities, was the largest since August 2009.

Economists had forecast consumer spending increasing 0.8 percent in September. The data was included in last Friday’s third-quarter gross domestic product report, which showed consumer spending growth slowing to a 2.4 percent annualized rate after a robust 3.3 percent pace in the second quarter.

The moderation in consumption was offset by a rise in inventory investment, business spending on equipment and a drop in imports, which left the economy growing at a 3.0 percent rate in the third quarter after the April-June period’s brisk 3.1 percent pace.

3% growth is very nice, taking into consideration the current economy.

[GordonJ]

Originally Posted by Nilson

3% growth is very nice, taking into consideration the current economy.

unemployment rate is at a 16-year low of 4.2 percent.
wages are up 2.9 percent
The median home sales price rose more than 5 percent from last year.
700,000 people got hired in the retail sector during the past year.
Manufacturing activity is at a 13-year high
a record 6.2 million open jobs in America
All time records for stock market, DOW at record highs, S&P 500 just posted a record sixth straight record close
Records in semi truck sales
Rail traffic at record highs
Airlines flying a record number of people,
Even cars are rebounding, GM up 12% Ford Up 9%

All this AND billions being sucked up by natural disasters.

I guess Cleveland needs to be hit by a hurricane if the Browns ever want to win a SuperBowl or the Indians a World Series.

Now the BROWNS, that's some real BAD news.

But the "current economny" offers unprecedented opportunity to those who have the desire, and the focused activity to take advantage of it.

GordonJ