Consumer spending up 0.8% in September; 3rd straight monthly gain
WASHINGTON -- Consumer spending rose 0.8% in September, the third straight monthly gain and the biggest increase since February, the Commerce Department said Monday.
Personal consumption expenditures increased $87.9 billion last month after increasing a revised $59.9 billion, or 0.5%, in August. Consumer spending has been up each month since coming in flat in June following a decrease of 0.2% the month before.
September’s figure came in above analyst expectations of an increase of 0.6%.
“This means the fiscal cliff is not worrying consumers at this point like it is the business sector,” said Chris Rupkey, chief financial economist for the Bank of Tokyo-Mitsubishi in New York, noting business investment spending was down in Friday’s report on third-quarter economic growth.
“The good news is that capital spending will resume if consumers keep buying at a moderate pace,” he said.
Personal income also increased in September, up 0.4% after rising just 0.1% in August. And the personal savings rate dropped to 3.3% from 3.7% in August.
Inflation remained largely in check, rising 0.4% in September and up 1.7% compared with a year earlier. The Federal Reserve wants to keep inflation below 2% annually.