U.S. consumer spending in September recorded its smallest gain in eight months as personal income barely rose, suggesting some cooling in domestic demand after recent hefty increases.
The Commerce Department data and another report from the Labor Department released today also showed weak inflationary pressures, which would argue against the Federal Reserve raising interest rates at the end of the year.
U.S. central bank policymakers this week put a rate hike in December on the table with a direct reference to their final meeting of the year. The Fed has kept benchmark overnight interest rates near zero since December 2008.
“Today’s batch of data releases aren’t going to convince the doves to vote for a December rate hike,” says Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1 percent last month after rising 0.4 percent rise in August. September’s consumer spending data was included in Thursday’s third-quarter gross domestic product report.
Reuters has the full story.
