By Jeffrey Sparshott and Anna Louie Sussman
WASHINGTON--Consumer spending rose in September, a sign of resilience among households amid steady job creation.
Personal consumption, which measures how much Americans spent on everything from airfare to autos, rose 0.5% in September from a month earlier, the Commerce Department said on Monday. Incomes gained 0.3%.
Economists surveyed by The Wall Street Journal had expected personal spending and income both to increase 0.4% in September.
Consumer spending accounts for about two-thirds of total output in the U.S. and household outlays have been the main driver of economic growth throughout much of the expansion. Americans had appeared more cautious in recent months amid declining confidence in the economy, though the latest data may help allay those concerns.
In the third quarter of the year, personal-consumption expenditures rose at a 2.1% pace, down from 4.3% during the prior period, according to separate data released last week. The University of Michigan's consumer sentiment index, meanwhile, matched a two-year low in October.
Uncertainty generated by the looming U.S. presidential election could be one factor weighing on consumer confidence. The labor market also has slowed, though it continues to generate jobs at a healthy pace.
Economists and policymakers still expect consumers to remain a key support through the end of the year and the latest data backs that up.
Monday's figures showed purchases of autos and other big-ticket items surged in September--spending on durable goods climbed 1.3%.
Americans also saved a little less. The personal saving rate fell to 5.7% from 5.8% the prior month.
Inflation pressures, meanwhile, appear to be stirring though overall they remain muted.
The personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, rose 0.2% in September from the prior month. From a year earlier, the index was up 1.2%. That was the firmest year-over-year reading since November 2014.
Inflation has fallen short of the Fed's 2% target for more than four years.
So-called core prices, which exclude the volatile categories of food and energy, advanced 0.1% from the prior month and were up 1.7% from a year earlier.
Fed officials are watching key metrics such as household spending, inflation and hiring as they weigh another move on the central bank's benchmark interest rate.
When adjusting for inflation, consumer spending climbed 0.3% in September from the prior month. Inflation-adjusted disposable personal income--income after taxes--was flat.
The Commerce Department report on personal income and spending can be accessed at http://www.bea.gov/newsreleases/rels.htm.
Write to Jeffrey Sparshott at email@example.com and Anna Louie Sussman at firstname.lastname@example.org.
(END) Dow Jones Newswires
October 31, 2016 08:45 ET (12:45 GMT)
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