WASHINGTON (11/2/15)--Personal spending climbed 0.1% in September, a deceleration compared with August’s 4% increase, according to numbers released Friday by the Bureau of Economic Analysis (Economy.com Oct. 30).
A slowdown in disposable income growth drove the step back, falling to 0.1% growth after 0.4% the previous month. Furthermore, real disposable income growth slipped to 0.2% in September after climbing 0.4% the prior month.
The overall performance was the weakest since March.
“Private sector wages and salaries weighed the most on personal income growth last month,” said Bernard Yaros, Moody’s analyst (Economy.com). “The September jobs report had already telegraphed that nominal wages would be a considerable drag.”
Yaros added that September’s labor income proxy--the product of average hourly earnings and hours worked for all private workers--dropped 0.2%, with hours worked fueling the declines. Hourly earnings were largely unchanged.
After plummeting nearly 5 points in September, meanwhile, consumer sentiment as tracked by the University of Michigan’s monthly consumer sentiment survey rebounded in October by 2.8 points.
The current economic conditions component stepped higher by 1.1 points for the month, though it fell fall short of initial projections for October’s final number.
“Confidence in the labor market has been shaken after a few months of weak job gains,” said Jeremy Cohn, Moody’s analyst (Economy.com). “Lousy wage growth has held back the sense of recovery that consumers have been looking for.”
Still, consumer expectations climbed 3.9 points in October.