WASHINGTON (9/30/13)--Purchases by U.S. consumers increased in August--despite government cutbacks--for a fourth consecutive month. Rising incomes lifted consumer spending, which comprises the largest part of the economy (Bloomberg.com, The Wall Street Journal and The New York Times Sept. 27).
Household spending--or personal purchases--climbed 0.3%, after a 0.2% gain in July, the Commerce Department said Friday.
Stock market advances, escalating home values and a better job market are mitigating the effects of this year's payroll tax hikes, providing households the ability to maintain purchases, Bloomberg said. However, spending has shown scant momentum since the second quarter ended, Bloomberg added.
Although there were stronger wage advances and respectable growth in personal income last quarter, those figures indicate the holiday shopping season will be--at best--adequate, said Gus Faucher, a senior economist at PNC Financial Services Group Inc. in Pittsburgh.