Wed Nov 27, 2019, 12:31 PM

U.S. Economy in Modest Start to Quarter as Consumers Tepid

bY Vince Golle
November 27, 2019

U.S. Economy in Modest Start to Quarter as Consumers TepidView photos
(Bloomberg) -- The U.S. economy registered a modest start to the fourth quarter as consumers restrained their spending while demand for business equipment unexpectedly jumped, likely providing enough fuel to keep the record-long expansion chugging along.

Purchases, which account for about two-thirds of the economy, rose 0.1% from the prior month after adjusting for inflation. While that exceeded analyst projections for no change, it was the weakest gain since February and reflected a drop in auto demand.

Inflation-adjusted disposable income fell 0.3%, the most since 2015, though that was due to declines in interest and farm income, while wages and salaries posted a solid increase of 0.4%.

The figures indicate a more-tempered pace of household spending heading into the key holiday-shopping day known as Black Friday. Consumers have been fueling growth at a time when companies have been slowing investment, global economies remain feeble and trade policy adds to the uncertainty. At this rate, consumption will cool from the third quarter’s 2.9% pace of gains, which was down from the prior period’s 4.6%.

Nominal consumer spending rose 0.3% in October from the prior month, matching the median estimate of economists in the Bloomberg survey.


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