Consumer spending dipped in October for first time in five months
WASHINGTON -- Consumer spending dipped in October, the first decline in five months, as Superstorm Sandy took a big bite out of paychecks in the Northeast.
Personal consumption expenditures fell by $20.2 billion, or 0.2%, last month compared with September, the Commerce Department said Friday. Income growth was basically flat in October, increasing $800 million, or less than 0.1%.
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Both figures came in below analyst expectations of about a 0.1% rise in spending and a 0.2% increase in personal income.
The Commerce Department said the impact of Superstorm Sandy, which hit the East Coast on Oct. 29-30, was felt in 24 states, particularly in New York and New Jersey.
Work interruptions reduced wages and salaries by about $18.2 billion, the agency said.
Consumer spending was up 1.7% in October from the same month last year.
Inflation remained tame in October, with the monthly price index, excluding volatile food and energy, up 0.1% last month from September.
Year-over-year, the personal consumption expenditures price index is up 1.6%, below the Federal Reserve’s annual inflation target of 2%.
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