Consumer spending down for 1st time in 5 months
WASHINGTON -- Consumer spending dipped in October, the first decline in five months, as Superstorm Sandy took a big bite out of paychecks in the Northeast.
Personal consumption expenditures fell by $20.2 billion, or 0.2 percent, last month compared with September, the Commerce Department said Friday. Income growth was basically flat in October, increasing $800 million, or less than 0.1 percent.
Both figures came in below analyst expectations of about a 0.1 percent rise in spending and a 0.2 percent increase in personal income.
The Commerce Department said the impact of Sandy, which hit the East Coast on Oct. 29-30, was felt in 24 states, particularly in New York and New Jersey.
Work interruptions reduced wages and salaries by about $18.2 billion, the agency said.
Consumer spending was up 1.7 percent in October from the same month last year.
Inflation remained tame in October, with the monthly price index, excluding volatile food and energy, up 0.1 percent last month from September.
Year-over-year, the personal consumption expenditures price index is up 1.6 percent, below the Federal Reserve's annual inflation target of 2 percent.