US consumer spending dropped in September by 0.2 percent, the first drop in consumer spending in eight months, according to a report by the Commerce Department released on Friday.
The drop comes following a surge in consumer spending of 0.5 percent in August. It is an indicator that the US economy may be losing momentum as it enters the fourth quarter.
Personal income increased modestly in September, by 0.2 percent, which is the smallest rise since December.
These figures are far lower than what most analysts had expected. Many had forecast that consumer spending would slow down a bit in September, however, still increase a bit, by around 0.1 percent. In regards to personal income most analysts had forecast a 0.3 percent rise.
“Private wages and salaries increased $12.6 billion in September, compared with an increase of $36.3 billion in August. Goods-producing industries’ payrolls increased $0.7 billion, compared with an increase of $4.8 billion; manufacturing payrolls decreased $0.3 billion, in contrast to an increase of $2.2 billion. Services-producing industries’ payrolls increased $11.9 billion, compared with an increase of $31.4 billion. Government wages and salaries increased $1.4 billion, compared with an increase of $0.9 billion.”