US Consumer Spending Slows Amid Weak Economic Confidence
SputnikNews.com
30.10.2015
Weakness in the US consumer market increased in September amidst the anxiety in the broader economy, lack of effective prices gains and labor market uncertainty, preventing the US Fed from a December hike in borrowing costs.
Kristian Rouz – Consumer spending in the US gained the least in eight months in September despite the upbeat GDP growth in Q2, explaining the decline in the pace of economic expansion the following quarter and falling in line with the labor market fatigue. Rise in disposable personal income also nearly halted, and reported inflation is still weak, effectively cooling expectations for the December hike in borrowing costs by the Federal Reserve – the US economy is not yet strong enough to handle the challenge of tighter monetary policy.
According to two separate reports by the US Labor Department and the Department of Commerce released on Friday, gains in the US consumer spending and core price index were too weak in September to support policy change planned by the Fed. At this point, market expectations of a December Fed hike are fading.
Spending on consumer goods added a negligible 0.1% in September, the slowest pace since January compared to the 0.4% rise in August, the Commerce Department reported.
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