Consumer Spending Down In September

by Darren

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The beleaguered consumer is feeling the pinch. The housing downturn and the credit crunch have conspired to slow consumer spending in September. The Fed has been pushing rate cuts with the idea that it would entice consumer to borrow/spend even more. So far that hasn’t happened.

Consumers, battered by a steep downturn in housing and a severe credit crunch, slowed spending growth in September to the weakest performance in three months.

The Commerce Department reported Thursday that consumer spending rose by 0.3 percent in September, slightly lower than the 0.4 percent increase that analysts had been expecting. Incomes grew by 0.4 percent, matching the August gain, and in line with analysts’ forecasts.

Economists are worried that consumers, the main support for the economy, may cut back on their visits to the malls in coming months as they struggle with the housing slowdown, tighter credit and now record-high oil prices.

Obviously the main concern for the economy is what a slow Christmas will do to earnings. For companies relying on a big holiday season, gloomy consumers are not an answer.

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