By According to recent data, consumer spending in the United States rose a modest 0.2% in October, potentially indicating a long-anticipated slowdown in the country’s economy. This figure aligns with the predictions of analysts polled by the Wall Street Journal, who had forecasted a 0.2% increase.
Consumer spending serves as the primary engine driving the U.S. economy, and while outlays experienced a robust 3.6% growth in the third quarter, this increase was higher than expected and not deemed sustainable.
Incomes also saw a slight rise of 0.2% in October, according to the government’s report on Thursday.
The Big Picture
The burst of growth witnessed in the third quarter now appears to have faded. Higher interest rates have dampened spending on big-ticket items, such as cars, and have discouraged business investment. Furthermore, persistent inflation has made Americans more selective about their purchases.
However, consumers are unlikely to drastically reduce their spending while they feel secure in their jobs. The current labor shortage, considered the most severe in decades, has given employees considerable leverage over employers, and this situation is likely to persist for an extended period.
Market Outlook
Before markets opened on Thursday, both the Dow Jones Industrial Average (DJIA) and the S&P 500 were projected to experience gains in trading. Meanwhile, the yield on the 10-year Treasury note remained relatively stable at 4.29%.
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