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VOL. 127 | NO. 212 | Tuesday, October 30, 2012

Consumer Spending Rose 0.8 Percent in September

By MARTIN CRUTSINGER

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WASHINGTON (AP) – Americans increased their spending in September at twice the rate that their income grew, a sign of confidence in the economy. Still, consumers made up the difference by saving less for a third straight month, a troubling trend.

The Commerce Department said Monday that consumer spending increased 0.8 percent in September from August. That followed a 0.5 percent gain in August and was the best showing since February.

Personal income rose 0.4 percent, an improvement from a slight 0.1 percent gain in August and the best gain since March. However, after adjusting for inflation and taxes, income was flat in September. That followed a 0.3 percent decline in August.

Consumer spending is important because it drives nearly 70 percent of economic activity.

A pickup in consumer spending helped lift economic growth in the July-September quarter to a 2 percent annual rate. While that is faster than the 1.3 percent rate in the April-June period, it’s still too weak to create enough jobs to rapidly lower the unemployment rate.

The savings rate dropped to 3.3 percent of after-tax incomes in September, down from 3.7 percent in August and 4.1 percent in July.

Americans also paid more for gas in September. That drove an inflation gauge tied to consumer spending up 0.4 percent last month. But excluding food and energy, prices rose just 0.1 percent. And gas prices have dropped since then, which could encourage more spending elsewhere.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 89 11,854
MORTGAGES 91 150 15,500
FORECLOSURE NOTICES 17 42 3,065
BUILDING PERMITS 384 384 28,610
BANKRUPTCIES 62 128 11,435
BUSINESS LICENSES 24 50 4,205
UTILITY CONNECTIONS 112 253 17,437
MARRIAGE LICENSES 19 43 3,607

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