For the fifth straight month in a row, personal consumption spending showed an increase, despite the impact of the Covid-19 outbreak and national economic shutdown.
According to the latest numbers released by the Commerce Department, personal consumption expenditures registered a 1.4% gain in September, the most recent month analyzed.
The increase comes as personal income levels also saw a slight improvement of 0.9% over August, when they were down by a substantial 3%.
Analysts generally regard the new spending numbers as good news: “Consumers doled out more on autos, clothing, and footwear, continuing a trend of robust outlays on goods due to pent-up demand from pandemic-related economic disruptions,” notes the Wall Street Journal of the Commerce report.
“Consumers bought new cars and trucks in September, purchased new clothes for the start of the school year and cooler fall weather, and spent more on recreation such as gym memberships and park fees,” observed the financial news service Market Watch.
“This once again proves that people are gradually showing faith in the economy,” asserted the site Nasdaq.com. But the site was quick to add: “However, fears have once again started gripping the nation with a record jump in daily coronavirus cases, which may compel people to stockpile on necessities again.”
The same Commerce Department report explained the rise in personal income as due to “increases in proprietors’ income, compensation of employees, and rental income of persons that were partly offset by a decrease in government social benefits.”
In fact, overall government wages and salaries were off by a large $7.4 billion in September, a loss partly attributable to a decline in both unemployment insurance as well as pandemic unemployment compensation.
In a separate survey, the Bureau of Economic Analysis is reporting that the nation’s gross domestic product increased by 33% in September, a significant improvement over 31.4% decline earlier this summer.
The BEA report noted that the strong GDP increase is reflective of “continued efforts to reopen businesses and resume activities that were postponed or restricted due to Cobid-19.”
By Garry Boulard
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