By Jim Puzzanghera, Los Angeles Times –
WASHINGTON—Consumer spending rose 0.8 percent in September, the third straight monthly gain and the biggest increase since February, the Commerce Department said Monday.
Personal consumption expenditures increased $87.9 billion last month after increasing a revised $59.9 billion, or 0.5 percent, in August. Consumer spending has been up each month since coming in flat in June following a decrease of 0.2 percent the month before.
September’s figure came in above analyst expectations of an increase of 0.6 percent.
“This means the fiscal cliff is not worrying consumers at this point like it is the business sector,” said Chris Rupkey, chief financial economist for the Bank of Tokyo-Mitsubishi in New York, noting business investment spending was down in Friday’s report on third-quarter economic growth.
“The good news is that capital spending will resume if consumers keep buying at a moderate pace,” he said.
Personal income also increased in September, up 0.4 percent after rising just 0.1 percent in August. And the personal savings rate dropped to 3.3 percent from 3.7 percent in August.
Inflation remained largely in check, rising 0.4 percent in September and up 1.7 percent compared with a year earlier. The Federal Reserve wants to keep inflation below 2 percent annually.
