Consumers Show Caution in Spending
Despite strong gains in wages and salaries, American consumers increased their spending at an unexpectedly modest pace in October, showing caution in the face of a struggling housing market.
Personal spending rose $16.9 billion in October, up 0.2% from the previous month, the Commerce Department reported. Spending had fallen 0.2% in September but was up 0.1% in August.
Adjusted for inflation, consumer spending rose 0.4% in October, helped by a decline in gasoline prices.
Some economists had expected stronger spending in October, considering the sharp drops in gasoline prices in recent months. Gasoline fell to roughly $2.29 in late November from an average topping $3.08 a gallon in early August. Each one-cent decline in gasoline prices adds roughly $1 billion to consumers' spending power, at an annualized rate.
The modest gains in spending were especially surprising given that consumers' incomes grew at a healthy pace in October. Personal income advanced at a seasonally adjusted rate of 0.4%, following a 0.5% gain in each of the three preceding months, the Commerce Department said.
Wages and salaries, which account for a large share of personal income, climbed 0.6% in October, matching September's advance. Economists said wages are rising because companies are finding that they must compete for qualified workers in an increasingly tight labor market. The unemployment rate was 4.4% in October, a five-year low.
Nonetheless, analysts said some consumers remain guarded about spending because the struggling housing market makes them feel less wealthy and there's a concern that energy prices could escalate.
We hoped the drop-off in gas prices would have added more vigor" to consumer spending in October, said Stephen Gallagher, an economist at Société Générale SA in New York. "Maybe they're worried about their home values and gas prices."
So far, retailers have reported mixed results this holiday season. For November, Corp., reported healthy sales gains for last monthAlso Thursday, the Labor Department said initial claims for unemployment benefits rose by 34,000 to 357,000 in the week ended Saturday. The four-week moving average rose by 7,250 claims to 325,000, the highest level since June 3. A Labor Department official said the rise may be due to seasonal variations common to the holiday season.
[ 本帖最后由 Trend 于 2007-1-10 18:26 编辑 ] |