On Friday, the Bureau of Economic Analysis released personal income and outlays figures for the month of October. The report indicates that consumer spending fell for the first time in five months in part due to hurricane Sandy. Spending fell 0.2 percent for the month, led by a 1.7 percent decline in spending on durable goods.
The BEA reports that it cannot quantify the total impact of hurricane Sandy on personal income and outlays, but does note that the storm had a noticeable impact on the October figures.
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(Percent change from preceding month.)
Economists polled by Reuters were expecting consumer spending in October to remain flat for September. The spending decline and flat income growth has sparked fears that fourth-quarter economic progress will be slow. However, negative fourth-quarter projections are at least partially balanced by an upward revision of third-quarter GDP growth on Thursday, which suggests real GDP grew 2.7 percent instead of the 2.0 percent estimated earlier.
The personal consumption expenditure index, a measure of the change in price for consumer goods and services, grew 1.7 percent in the 12 months ended in October, 0.1 percentage point higher than the 12-month rate through September.
Compounded by finger wagging in Washington, the markets are trading lower on the news. At 11:30 AM: Dow: -0.21 percent, S&P 500: -0.19 percent, Nasdaq: -0.37 percent. Ten-year bonds are flat.