Consumers increase spending in October

Consumers increased their spending in October, says the BEA Real consumer spending increased in October for the fourth straight month, showing further signs that the economy is slowly on its way to recovery as fewer consumers need to consolidate debt.

According to the Bureau of Economic Analysis’s Personal Income and Outlays report for October, personal income increased by 0.2 percent, or $30.1 billion, while disposable personal income increased by 0.4 percent, or $45.7 billion.

Both figures represented the largest of the gains that had been seen over the last four months. Each figure’s last decline occurred in June when personal income and DPI dropped 1 and 0.9 percent respectively.

Despite the increase, which was above the estimates of MarketWatch experts, Moody’s economist Scott Hoyt said that it would remain behind gross domestic product figures.

"Spending, which makes up about 70 percent of [gross domestic product], is expected to generally lag growth in GDP in the coming quarters due to the weights of weakening housing markets and job growth and record financial obligations," he said, according to MarketWatch.

The report also found that the real DPI – which adjusts the figure to remove price changes – had in increased by 0.2 percent in October following a 0.1 percent in September.