Consumer spending in the US rose 0.4pc in October from the previous month, the largest increase in spending since July. The bigger than expected rise, reported this afternoon by the Commerce Department said, came despite a modest 0.1pc increase in personal income, the smallest rise since July. The increase in consumer spending last month came from rising spending on non-durable goods and on services, which was up 0.7pc. Durable goods spending dropped 1.0pc in October as sales of cars tumbled as zero percent financing offers came to an end.
Adjusted for inflation, overall spending in October was below the average spend in the previous three months, suggesting a slowdown in spending in the run up to the holiday season. Consumers spent at a USD6.59 trillion annual rate in October, less than the USD6.61 trillion third-quarter average. "Thanks to aggressive discounting by US retailers and car manufacturers, the US consumer remained active throughout 2002. However recent retail activity has shown signs of stalling, as US consumer confidence has fallen to levels not seen in nine years," said Niall Dunne, economist at Ulster Bank in his 2003 Outlook bulletin. //www.fxcentre.com