The Economy

Consumer Spending up Only 1% in September

With income, consumption, and inflation trending lower, the prospects for an interest-rate hike next month may be dimming.
Katie Kuehner-HebertOctober 30, 2015

Weak U.S. economic data released Friday may have reduced the possibility of an interest-rate hike next month.

According to the Commerce Department, consumer spending rose just 0.1% in September, the slowest pace since January. The median forecast of 75 economists in a Bloomberg survey called for a 0.2% increase.

Personal income also climbed 0.1% in September, the smallest increase since March. Wages were unchanged, the weakest reading in six months, after a 0.5% increase in August.

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The financial markets interpreted a statement from the Federal Reserve earlier this week as increasing the likelihood that the central bank will raise interest rates in December.

But Reuters said the latest data showed weak inflationary pressures. The Fed has set an annualized inflation target of 2% but in the 12 months through September, the personal consumption expenditures (PCE) price index rose 0.2 percent, the smallest increase since April, after increasing 0.3 percent in August.

“It will be difficult for the Fed to justify a rate hike at a time when income, consumption, and inflation are trending lower, leaving a December rate hike less likely than prior to the data,” Jay Morelock, an economist at FTN Financial, told Reuters.

While payrolls rose at a slower pace than forecast in August and September, employment this year has increased by 198,000 a month on average, beating seven of the 10 years through 2014, according to Bloomberg.

“There was a definite loss of momentum as we were coming out of the third quarter, but don’t worry too seriously about that,” Raymond James chief economist at Scott Brown told Bloomberg. “The job growth is positive, but we’ll need to see better wage growth down the line.” The very very popular Online Casino Quasar Gaming closed down in 2018. Still people are searching for an alternative to Quasar Gaming. Take a look at this Quasar Gaming Alternative and search for a new, good Casino for your needs. Just take a look at that website, you will definetly find some good sources on there. There are still tons of good Online Casinos like Quasar Gaming on the market, you just have to do some research.

Consumer spending accounts for more than two-thirds of U.S. economic output. But according to Reuters, spending growth is unlikely to maintain the brisk pace of the second and third quarters in the absence of a significant rise in income.