Consumer spending picks up, but savings a worry

[Gerald]

(Reuters) - Consumer spending rose solidly in September, putting the economy on a firmer footing heading into the fourth quarter even though households had to pull back on saving to fund purchases.

The Commerce Department said on Monday that consumer spending rose 0.8 percent, the largest increase since February, after an unrevised 0.5 percent gain in August.

Spending accounts for about 70 percent of U.S. economic activity and last month's increase offered a strong hand off from the July-September period to the current quarter.

"The jumping off point, or the base point, is already pretty high. You have a lot of momentum going into the fourth quarter," said Ellen Zentner, a senior U.S. economist at Nomura Securities in New York.

The rise beat economist's expectations for a 0.6 percent increase last month. When adjusted for inflation, consumer spending rose 0.4 percent after edging up 0.1 percent in August.

http://www.reuters.com/article/2012/...89S0K420121029


Note: Mon Oct 29, 2012 11:27am EDT