Consumer Spending Cools in U.S. as Households Boost Savings
By Shobhana Chandra - Nov 8, 2013
Consumer spending in the U.S. cooled in September as households put more money in the bank heading into the partial government shutdown.
Household purchases, which account for about 70 percent of the economy, rose 0.2 percent after a 0.3 percent gain the prior month, Commerce Department figures showed today in Washington. The advance matched median forecast of 78 economists in a Bloomberg survey. The saving rate rose to the highest level of the year as incomes increased 0.5 percent for a second month.
The report is consistent with data yesterday that showed household spending rose in the third quarter at the slowest pace since 2011. While gains in housing and equity prices are helping Americans, the lack of faster hiring and depressed sentiment due to the 16-day federal government shutdown may restrain growth this quarter.
“Consumers are doing OK, they’re spending,” Joseph LaVorgna, chief U.S. economist in New York at Deutsche Bank Securities Inc., said before the report. “Big-ticket purchases are doing reasonably well.”
A report from the Labor Department today showed payrolls climbed by a greater-than-forecast 204,000 in October and the jobless rate climbed to 7.3 percent from an almost five-year low of 7.2 percent in September.
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http://www.bloomberg.com/news/2013-11-08/consumer-spending-cools-in-u-s-as-households-boost-savings.html