Consumer Spending, Labor Costs, Consumer Sentiment
October 30, 2015
Friday – October 30
The Commerce Department reported on Friday that consumer spending registered its lowest reading in eight months, while incomes barely rose. This signals an ease in domestic demand as the holiday shopping season draws near. Personal Spending rose a scant 0.1% in September, just below the 0.2% expected. Personal Incomes rose 0.1%, also below the 0.2% expected. Consumer spending accounts for more than two-thirds of U.S. economic activity.
Labor costs across the nation rose in the third quarter, though it hasn’t been reflected in higher wages for employees. The Labor Department’s Employment Cost Index rose 0.6% in the July-August-September period after a 0.2% increase in the first quarter of this year. The figure includes wages and salaries. Benefits rose 0.5%.
Consumer Sentiment edged higher in October, but the rise was mainly concentrated in the lower-income households. Those Americans in higher income levels were less confident due to the recent turbulence surrounding the financial markets. The Consumer Sentiment Index came in at 90.0 for the final reading in October, above the 87.2 in September. A spokesperson for the survey said that “consumers will continue to make increases in their buying plans contingent on the availability of price discounts and low interest rates.”
