Americans' Spending, Income Up in September

Consumer spending increased somewhat in September, but income grew by the largest amount in 10 months, a federal report says.

The U.S. Department of Commerce said income rose 1.7 percent, due in part to post-hurricane insurance payouts, which increased at a $120 billion annual rate, Reuters reported. Consumer spending increased 0.5 percent in September, but when the figures were adjusted for inflation, the increase turned into a 0.4 percent drop because soaring fuel prices eroded the gains.

Consumer spending amounts to about two-thirds of all economic activity. The report showed the spending went up on “nondurables,” such as food, clothes and gasoline, but dropped for bigger ticket items, such as cars.


Click Here Don’t miss the FRx Express-the traveling FRx Software product and training road show, coming soon to a city near you! Discover helpful FRx Software tips and tricks, see product demonstrations of Microsoft® FRx® and Microsoft Forecaster, and attend a product Q & A forum. Register now!

Download our free whitepapers today!

FRx Software Home Product Information
Training & Consulting Product Demo
Webcast Customer Testimonial Video

Analysts said that Hurricanes Katrina and Rita made the spending and income data difficult to interpret.

The income figures for August had been revised downward to a 0.9 percent drop, due to the uninsured business property losses in the Gulf Coast caused by Hurricane Katrina, which hit August 29.

The Commerce Department reported that by removing the depressed rental and proprietors' income and the income increase from insurance that followed, personal income would have grown by 0.5 percent in September and 0.3 percent in August.

"We don't get away scot-free, but the underlying economy remains tough and sturdy," Mark Zandi, chief economist at, told the Associated Press.

Analysts expect consumer spending to drop off in the last quarter of the year, as Americans will have to dig deeper to pay energy costs. Auto sales incentives are also ending.

"We will see a moderation - but not a collapse - in consumer spending," predicted Anthony Chan, senior economist at JP Morgan Asset Management, according to AP.

A separate report on Midwest manufacturing noted increases in new orders and new hires. An index of Midwest manufacturing activity rose in October to 62.9 from 60.5 in September, according to the National Association of Purchasing Management-Chicago.

"It reaffirms the view that the U.S. economy remains on a solid growth track," Alex Beuzelin, a senior market analyst with Ruesch International in Washington, told Reuters.

You may like these other stories...

By Deanna C. White Millennials may be incredibly savvy when it comes to using technology to research nearly every decision they make, but when it comes to determining their financial habits, a new survey suggests they...
By Deanna C. White A survey by the American Institute of CPAs (AICPA) indicates that many American parents are still reluctant to engage their children in significant conversations about money, with only 13 percent of...
By Jason Bramwell The percentage of higher education leaders who  are "very concerned" about their ability to maintain current enrollment levels is on the rise, according to the second annual Higher...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.