U.S. consumer spending rose in September as Americans saved less to fund purchases amid weak income growth, which could cast doubts over the durability of the third-quarter's economic growth spurt.
US Q3 wage growth slows, benefits up least since '99:
U.S. civilian employment costs rose much less than expected during the third quarter as wages and salaries posted their weakest growth in a year while benefits expanded at their slowest pace since 1999, government data showed.
KURT KARL, CHIEF U.S. ECONOMIST, SWISS RE, NEW YORK
Very weak income but very solid consumption even though consumer confidence is in recession so that's good news for the economy. It's hard to sustain without more income growth. It's hard to keep it going into the fourth quarter and early next year. Part of the third-quarter growth is from a pickup in auto sales and production so you don't have a good feel on how fourth quarter. We don't have a great generator of growth anywhere in the economy. Exports are softening because the global economy is softening.
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK
We knew much of the headline numbers from yesterday in the GDP report. The surprise here is personal income was weaker than expected coming in only at 0.1 -- if you look at disposable income over the past quarter it has been pretty miserable with declines over the previous months, so consumers are spending but at the same time disposable income is declining.
WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK
Looks like a nonevent. I'm not getting much out of this, but it certainly doesn't look bad and the employment cost index being less than expected is good.
The big news of the week was yesterday, and today we're seeing typical price action after that kind of move. We may see a consolidation over the next week, but then a sustained rally after that.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
With income weak through Q3 and spending firm, the savings rate has fallen to 3.6%, its lowest since December 2007, and with confidence weak there must be doubts as to how much further savings can fall, meaning that without a pick up in income trends, spending is likely to slow.
STOCKS: U.S. stock index futures hold steady at lower levels.
BONDS: U.S. Treasury debt prices hold steady at higher levels.
FOREX: The dollar extends gains versus euro.