Nothing really surprising about the latest numbers.
Consumers kept a tight grip on their wallets in September, increasing their spending by only 0.1 percent. Incomes, meanwhile, rose briskly.
The income numbers give rise to continued optimism.
Here's the lay of the land.
The increase in spending in September, down from a 0.2 percent gain posted in August, was the smallest in 10 months. Economists said the new spending figure was held back by falling gasoline prices.
I don't know about you, but I was glad to spend less...at the pump!
Americans’ incomes — the fuel for future spending — rose by a brisk 0.5 percent in September. That was up from 0.4 percent in August and marked the biggest gain since June.
That's always good news. Unless, of course, you're an employer whose business is not growing.
September’s spending increase was weaker than the 0.3 percent gain that economists were expecting. Income growth, however, turned out to be stronger than the 0.3 percent increases that economists were forecasting.
Shocking development: Our friends the 'speculators' were wrong again. But there is good better news.
With income growth outpacing spending, Americans’ personal saving rate — savings as a percentage of after-tax income — came in at a negative 0.2 percent in September, an improvement from negative 0.5 percent recorded in August.
So the bleeding has slowed, but it hasn't stopped yet. Here's what many analysts are hoping for.
Economists, meanwhile, are hopeful the current October-to-December quarter will turn out to be better and that the housing slump will not be a significant drag on overall economic activity. In addition, lower energy prices should help out, taking pressure off consumers and businesses and making them more inclined to spend and invest.
Spend and invest. That should be music to our ears.
Even with the moderation, core inflation is still above the Fed’s comfort zone. Fed policymakers, however, are betting that slower overall economic activity along with lower energy prices will continue to lessen inflationary pressures in the months ahead.
So, all in all, things are generally looking good. That's a nice 'treat', not a 'trick'.
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