Tag Archives: Consumer Spending

Economic activity expanded in the closing weeks of 2012, the Federal Reserve said in its periodic Beige Book released Wednesday, reflecting a slow but steadily declining unemployment rate and low rates of inflation--conditions the Fed said would have to be met before it raises interest rates. According to the Beige Book, districts reported stronger consumer spending--about 70 percent of the nation's GDP--with holiday sales ""modestly higher"" than in 2011. At the same time, the report said business contacts were ""citing concerns that consumers will spend cautiously due to ongoing fiscal uncertainty.""

No matter how foggy the haze is, economists typically dust off their crystal balls in December. However economic forecasts too often involve driving by looking in a rear-view mirror. Anticipating what might happen in the housing markets, with so many moving parts involved, can be the trickiest of all forecasts. Because housing is a unique expenditure--combining elements of investment and a service--it depends on a variety of elements: employment, income, interest rates, the regulatory environment, and even the weather.

Superstorm Sandy blew a hole not in the nation's labor market, but in economists' crystal balls as the economy added 146,000 jobs and the unemployment rate fell to 7.7 percent--the lowest level since December 2008, Bureau of Labor Statistics (BLS)reported Friday. Economists had forecast payroll growth of 93,000, down from 171,000 as originally reported for October, and an increase in the unemployment rate from 7.9 percent to 8.0 percent. While the drop in the unemployment rate was a positive sign, it was driven largely by a drop in the labor force.

Consumer spending fell $20.2 billion in October as personal income remained relatively flat, the Bureau of Economic Analysis (BEA) reported Friday. The October report marked the first time since June in which income growth--however modest--exceeded spending. Still, income growth was the weakest it has been since last November, when it fell $31.1 billion in one month--a decline that was completely reversed one month later.

Real GDP growth for the third quarter was revised up significantly, the Bureau of Economic Analysis reported Thursday, reaching a 2.7 percent annualized growth. Economists had forecast a 2.8 percent growth rate. The report on GDP was the second of three monthly reports and billed as the ""second estimate."" The report on profits was the first of two and labeled ""preliminary."" Final reports on both will be released December 20.

Consumer confidence hit the wall in November as Americans sweat the rapidly approaching fiscal cliff, according to monthly survey results released by Thomson Reuters and the University of Michigan. The Thomson Reuters/University of Michigan Survey of Consumers showed confidence over the economy increased just 0.1 percent from October to November, hitting 82.7 on the Index of Consumer Sentiment. Preliminary data released earlier in November put the index at 84.9, and economists polled by Reuters expected a median index of 84.5.

Consumer spending rose $87.9 billion, 0.8 percent, in September, twice the 0.4 percent growth in personal income, the Bureau of Economic Analysis reported Monday. While the increase in income matched economist expectations, the increase in spending was higher than the forecast. It was the third straight month spending grew faster than income.

Led by increases in personal consumption, government spending and residential investment, the U.S. economy grew 2.0 percent in the third quarter, the Bureau of Economic Analysis reported Friday, faster than economists expected and a strong rebound from the 1.3 percent growth rate in the second quarter. Economists surveyed by Bloomberg had expected an increase of 1.9 percent.

A significant increase in home prices helped push Deloitte's Consumer Spending Index up in September, the company reported. The index, which tracks consumer cash flow as an indicator of future consumer spending, rose to 3.53 from 3.27 in August. A substantial 10.5 percent bump in housing prices accounted for much of the overall increase.

Consumer spending rose $57.2 billion, 0.1 percent, in August but personal income improved just $15 billion, 0.5 percent, the Bureau of Economic Analysis reported Friday. While the increase in spending matched economist expectations, the increase in incomes was half of what had been forecast.