Consumer Spending Soars Higher Than Forecast
From Staff Reports
The U.S. Commerce Department reported Friday that consumer spending rose more than forecast in the month of August. The 0.6% increase was the biggest in four months, according to Bloomberg News. It is good news that suggests the U.S. consumer has so far been undeterred by the credit crunch and housing slump.
Adjusted for inflation spending jumped 0.6%, after a 0.3% gain the month before. Inflation-adjusted spending on durable goods such as furniture and automobiles rose 2.8%.
The Federal Reserve’s preferred measure of inflation, which excludes food and energy costs, also showed positive signs in August. It increased 0.1% for the sixth consecutive month. It has rose 1.8% from a year ago, the smallest increase ]since February 2004. The Fed has said it prefers inflation to stay between 1% and 2%.
Also, according to the Commerce Department, construction spending made an unexpected jump, led by factories, hotels, and offices. The National Association of Purchasing Management-Chicago’s index of business activity picked up as well. The index rose to 54.2 in September, beating the 53.8 registered in August.