Consumer spending rises strongly in September

WASHINGTON, Mon Oct 29, 2012 – Consumer spending rose solidly in September as households stepped up purchases on automobiles and a range of other goods, setting up a firmer base for consumption this quarter.

The Commerce Department said on Monday consumer spending increased 0.8 percent after a unrevised 0.5 percent gain in August.

Economists polled by Reuters had expected spending, which accounts for about 70 percent of U.S. economic activity to increase 0.6 percent in September.

Consumers boost growth despite business caution

WASHINGTON, Fri Oct 26, 2012 – Economic growth picked up in the third quarter as a late burst in consumer spending offset the first cutbacks in investment in more than a year by cautious businesses.

Gross domestic product expanded at a 2 percent annual rate, the Commerce Department said on Friday, accelerating from the second quarter’s 1.3 percent pace.

Still, the stronger pace of expansion fell short of what is needed to make much of a dent in unemployment, and details of the report did not bode well for an acceleration in output in the fourth quarter, as a spurt in government spending was see as temporary.

A growth pace in excess of 2.5 percent is needed over several quarters to make substantial headway cutting the jobless rate. Economists polled by Reuters had expected a 1.9 percent growth pace in the third quarter.

The report offers little cheer for the White House ahead of the closely contested Nov. 6 presidential election, in which President Barack Obama is trying to fend off Republican challenger Mitt Romney.

U.S. stock index futures pared losses after the data, while Treasuries briefly cut early price gains. The dollar trimmed losses against the yen, and cut gains against the euro.

Since climbing out of the 2007-09 recession, the economy has faced a series of headwinds from high gasoline prices to the debt turmoil in Europe and, lately, fears of U.S. government austerity.

Retail sales point to stronger third-quarter consumer spending

WASHINGTON, Mon Oct 15, 2012 – U.S. retail sales rose in September as Americans bought more cars and gasoline, while a gauge of consumer spending pointed to stronger-than-expected economic growth in the third quarter.

Retail sales increased 1.1 percent, the Commerce Department said on Monday, beating expectations after an upwardly revised 1.2 percent rise in August.

Retail sales outside of autos, gasoline and building materials – a barometer of consumer spending known as core retail sales – rose 0.9 percent last month.

That was well above the 0.3 percent gain expected by analysts in a Reuters poll, and suggests consumers did more to drive economic growth in the July-September period than economists had expected.

Consumer spending drives about two-thirds of the U.S. economy.

Sluggish demand and a punishing drought restricted the economy to a 1.3 percent annual growth pace in the April-June period. Before the retail sales report was released, economists were expecting growth to accelerate to a 1.6 percent pace in the third quarter, according to a Reuters poll.

The details of the report showed broad strength across retailers, with sales of motor vehicles and parts up 1.3 percent. Receipts at gasoline stations rose 2.5 percent, reflecting an increase in prices paid at the pump.

Other categories were also strong, with sales at electronics retailers up 4.5 percent, while sales at food and beverage stores rose 1.2 percent.

Consumer spending rises modestly for April, inflation eases

WASHINGTON, Fri Jun 1, 2012 – Consumer spending rose modestly in April while incomes grew more slowly and inflation pressures eased, according to Commerce Department data published on Friday.

Spending climbed 0.3 percent, in line with forecasts in a Reuters poll and following a downwardly revised 0.2 percent gain for March.

Incomes increased just 0.2 percent, half of March’s pace and weaker than analyst estimates.

At the same, the Federal Reserve’s preferred measure of inflation remained comfortably within the central bank’s 2 percent target, at 1.9 percent.

Gross domestic product expanded just 1.9 percent in the first quarter, following downward revisions to an initial estimate this week. The softness raised new concerns about the economy’s vigor as worries about a Europe-led slowdown persist.

Americans continued tapping into their savings to sustain their spending. The savings rate continued a recent downward trajectory, dipping to 3.4 percent in April from as high as 5 percent last summer.

MasterCard quarterly profit up as consumers use more credit

PURCHASE, N.Y. – MasterCard Inc. reported a higher quarterly profit, as consumers around the world spent more money using credit and debit cards.

For the fourth quarter, the company which has beaten analysts’ expectations for seven straight quarters, posted a net income of $514 million, or $4.03 a share, compared with $415 million or $3.16 a share last year.

Total revenue was $1.72 billion, up 20 percent.

Excluding items, the company posted a net income of $19 million, or 15 cents a share.

Fourth-quarter revenue is typically higher as consumers buy more during the holiday shopping period and card processors provide higher rebates and incentives to cardholders.

Shares of the company closed at $357.62 on Wednesday on the New York Stock Exchange.

Consumer spending flat in December, savings up

WASHINGTON – Consumer spending was flat in December as households took advantage of the largest rise in income in nine months to boost their savings, setting the tone for a slowdown in demand early in 2012.

The Commerce Department said on Monday spending was the weakest since June and followed a 0.1 percent gain in November.

Economists polled by Reuters had expected spending, which accounts for more than two-thirds of U.S. economic activity, to nudge up 0.1 percent last month. For all of 2011, spending rose 4.7 percent, the largest increase since 2007.

When adjusted for inflation, spending dipped 0.1 percent, breaking three straight months of gains. It increased 0.1 percent in November.

The government reported on Friday that consumer spending grew at a 2.0 percent annual pace in the fourth quarter, helping to lift gross domestic product 2.8 percent – an acceleration from the third-quarter’s 1.8 percent rate.

Part of the spending, which has been concentrated in motor vehicles, has been funded from savings and credit cards as high unemployment constrains wage growth.

Wages rose last month, helping to prop-up incomes. Income advanced 0.5 percent, the largest gain since a matching increase in March, and followed a 0.1 percent rise in November. Economists had expected income to rise 0.4 percent.

Taking inflation into account, disposable income rose 0.3 percent after being flat the prior month. With disposable income outstripping spending, the saving rate rose to 4.0 percent from 3.5 percent in November.

Savings increased to annual rate of $460.1 billion, the highest since August, from $407.8 billion the prior month.

The report showed inflation pressures generally contained, with a price index for personal spending nudging up 0.1 percent after being flat the prior month.

Retailers in for steady, modest growth in 2012

NEW YORK/CHICAGO ― Hopefully, retailers liked 2011, because 2012 is looking like it will offer more of the same.

A consensus is emerging that the new year will again bring a slow but steady increase in business, after moderate growth last year that was capped by a holiday season that saw shoppers spend if stores gave out bargains.

“Consumers are doing everything they can in light of the current environment to be consumers,” Paul Hurley, founder and chief executive of Ideeli, a flash sales website. “We’re not seeing a deflationary spiral where people are putting off purchases.”

The National Retail Federation at the start of its annual convention in New York said U.S. retail sales should rise 3.4 percent this year, down from an increase of 4.7 percent in 2011, which came after weak sales in 2010.

“It’s realistic given the challenges that we face in the economy,” NRF Chief Executive Matthew Shay told Reuters in an interview, noting that improvements in consumer spending would continue to be “incremental” for the time being.

U.S. shoppers have been held back by modest growth in income and high unemployment, currently at 8.5 percent.

ShopperTrak, a data firm that makes sales projections based on foot traffic, expects sales to be “on par” with 2011 levels.

And Customer Growth Partners gave a preliminary forecast of 5 percent to 6 percent growth for 2012, including e-commerce. That compares with an expected 5.6 percent for the year that will end this month.

Last year, e-commerce sales rose 15 percent, according to comScore.

While unemployment remains high, consumer spending growth has outpaced overall economic growth because shoppers who spent freely during the housing boom in the early 2000s were forced to pay down debt during the recession. Also, consumers with jobs are now driving sales growth, said Craig Johnson, president of Customer Growth, a retail consulting firm.