Only a few days after the U.S. government reported that the economy expanded 2% in the third quarter on consumer spending, where they claimed that, "Household purchases, about 70 percent of the economy, rose at a 2.6 percent pace, the best quarter of the recovery that began in June 2009," a new conflicting report says otherwise.
A new report in the Associated Press titledSeptember consumer spending weak while incomes dip seems to directly contradict last weeks uplifting news:
Americans slowed their spending in September to the weakest pace in three months and their incomes fell for the first time in 14 months.
The Commerce Department says personal spending rose at an annual rate of 0.2 percent in September. That's below the 0.5 percent gains recorded in July and August. Incomes actually fell 0.1 percent in September, following a 0.4 percent rise in August that had been pushed higher by the return of extended unemployment benefits.
The weak growth in spending and incomes underscored how fragile the economy remains. Consumers facing high unemployment remain reluctant to spend.
With incomes falling for the first time in 14 months, consumer confidence has fallen to its 2010 lows. The Reuters/University of Michigan index of consumer sentiment fell to 67.7 from 68.2 last month.
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| Reuters Consumer Confidence Index |
These conflicting stories, both derived from the same Commerce Department data, clearly shows a desperate attempt to massage the numbers as favorably as possible. Meanwhile the bottom continues to fall out of the main street economy as Income inequality in America is at the highest level since the Census Bureau began tracking household income data in 1967, according to Reuters. It must be election season to have such neurotic headlines.
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