US personal spending up 0.5% in September, exceeding forecasts

In September 2024, personal spending in the United States rose by 0.5% from the previous month, reaching an annualized rate of $20.024 trillion.

US personal spending up 0.5% in September, exceeding forecasts

This increase accelerates from the upwardly revised 0.3% rise observed in August and surpassed market expectations of a 0.4% increase. The robust data underscores the resilience of U.S. consumers in the face of rising interest rates, providing the Federal Reserve with additional leeway to maintain restrictive rates aimed at combating inflation. Personal spending was primarily driven by higher expenditures on goods, which increased by 0.5%, recovering from a decline of 0.2% in August. Notably, spending on durable goods surged by 0.8%, a significant rebound compared to the previous month’s drop of 0.4%, indicating strong demand for long-lasting items. Meanwhile, non-durable goods also contributed to the uptick, showing a modest increase of 0.4%.

Consumer spending remains steady, reflecting confidence amid rates

Furthermore, spending on services remained consistent, rising by 0.5%, reflecting stable consumer confidence in the economy. This overall trend suggests that consumers are adapting to the higher interest rate environment, enabling continued economic activity. As a result, the data not only illustrates the strength of consumer spending but also reinforces the Fed's position in its ongoing efforts to manage inflation while navigating the complexities of the economic landscape.