Monday, November 01, 2010

Real Consumer Spending in September Bounces Back to Pre-Recession Level of $9.35 Billion

The BEA reported today that real personal consumption expenditures reached $9.349 billion in September, the highest level of U.S. consumer spending since the recession started in December 2007, 33 months ago (see chart above).  On a year-over-year basis, September's 2.3% increase in consumer spending was the largest percentage increase in three years, since September of 2007 (see bottom chart above).   


At 11/01/2010 9:27 AM, Blogger juandos said...

Note the following from ZeroHedge: One thing is sure to happen when Americans buy more iPads than they can afford: the savings rate will fall. Sure enough, the just reported September savings rate dipped to 5.3%, the lowest reading in 2010, and a decline from August's downward revised 5.6%. This is due to a miss in both personal income and personal spending, the former coming at -0.1% vs Exp. of 0.2 (and a prior revised to 0.4%) with the latter at 0.2% versus expectations of 0.4% (and an upward revised prior to 0.5%). The savings rate has now declined in a straight line since peaking at 6% (2010 high), to the current low. In other words Americans have been spending more than they were making for four months in a row....

So consumer spending is up...:-)

At 11/01/2010 10:48 AM, Anonymous Anonymous said...

Isn't it true that Real Consumer Spending includes government subsidized healthcare spending?

At 11/01/2010 10:54 AM, Blogger J said...

Mish and Karl Denninger have gone over how misleading the BEA survey is (only surveying open stores, so closed competition increases sales at existing places). Sales taxes ought to be booming if sales were this good?

There is similar divergence in jobs for ADP vs BLS. Here.

At 11/01/2010 11:56 AM, Blogger morganovich said...

the only think holding personal income up has been the extension of unemployment benefits.

"Americans slowed their spending in September to the weakest pace in three months and their incomes fell for the first time in 14 months.

Personal spending rose at an annual rate of 0.2 percent in September, the Commerce Department said Monday. That's below the 0.5 percent gains recorded in July and August.

Incomes fell 0.1 percent in September, following a 0.4 percent rise in August that had been pushed higher by the return of extended unemployment benefits."

my great fear is that we are mistaking inflation for real growth by under reporting CPI significantly.

if such is true, this recession is not over in real terms.


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