US consumer spending up in September

| October 29, 2011 | 0 Comments

Official figures have revealed consumer spending in the US improved last month.

According to the Commerce Department, consumer spending rose 0.6% to $68.7 billion (£42.7 billion) in September and follows a 0.2% rise in August.

The figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, personal incomes rose just 0.1% in the month after a 0.1% gain in August, the Commerce Department said.

Income growth is being limited by stubbornly high unemployment, with a jobless rate that has been above the 9% mark for five consecutive months.

The figures come just a few days after the Commerce Department revealed the world’s largest economy expanded at its fastest pace in a year in the three months to the end of September.

The US economy grew at an annualised rate of 2.5% in the third quarter of this year, which was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

However, despite both sets of encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Last week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of rising unemployment and a depressed housing market.

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