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Consumer spending up a slight 0.5% as virus maintains grip

WASHINGTON — U.S. consumers increased their spending by a sluggish 0.

WASHINGTON — U.S. consumers increased their spending by a sluggish 0.5% last month, the weakest rise since April, when the pandemic first erupted, and a sign that Americans remain wary with the virus resurging across the country and threatening the economy.

The October gain reported Wednesday by the Commerce Department followed a seasonally adjusted 1.2% increase in September. It suggested that consumer spending, the primary driver of the U.S. economy, is being restrained by a weakened economy and by the failure of Congress to provide another stimulus package to struggling individuals and businesses.

The government's report also showed that income, which provides the fuel for spending, fell 0.7% in October.

With new viral cases accelerating across the country, many states are adopting or considering new restrictions on businesses. Sales at restaurants and bars fell in October for the first time in six months. Restaurant traffic declined further in November, according to the reservations provider OpenTable. Hotel occupancy is down from a month ago. Consumer spending on credit cards dropped in the first week of November from a month earlier, according to data compiled by Opportunity Insights.

Economists warn that consumer spending could falter further in the current October-December quarter given that many of the big government support programs have expired and Congress has yet to renew the assistance.

Martin Crutsinger, The Associated Press

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