US consumer spending in fastest growth in 8 years
Consumer spending increases 1% in September but underlying inflation remained muted
US consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flooddamaged motor vehicles, but underlying inflation remained muted.
The Commerce Department said yesterday consumer spending, which accounts for more than two-thirds of US economic activity, jumped 1 per cent last month. The increase, which also included a boost from higher household spending on utilities, was the largest since August 2009.
Consumer spending rose by an unrevised 0.1 per cent in August. Economists polled by Reuters had forecast consumer spending increasing cent in September.
Prices of US Treasuries were higher in early morning trading while the dollar was weaker against a basket of currencies. US stock index futures were mixed. The data was included in last Friday’s thirdquarter gross domestic product report, which showed consumer spending growth slowing to a 2.4 per cent annualised rate after a robust 3.3 per cent 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 per cent rate in the third quarter after the April-June period’s brisk 3.1 per cent pace.
The Commerce Department said September data reflected the effects of Hurricanes Harvey and Irma, but said it could not quantify the total impact of the storms on consumer spending and personal income. 0.8 per