Consumer Spending Fuels U.S. Economy
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DETROIT — Americans continued their healthy spending in October, bumping auto sales up modestly as a surge in foreign nameplates more than offset weaker U.S. deliveries by Detroit’s traditional Big Three.
Overall industry sales for the month rose 2.4% to more than 1.3 million units, with all but three auto makers reporting results Tuesday. Sales continued at a strong pace, but slipped to a seasonally adjusted annual rate of 16.2 million units for the month from 17.1 million for September.
Separately, the Commerce Department said consumer spending rose 0.4% in September. The increase was slightly higher than expected by private economists, who attribute it to the nation’s prosperous economy, with low unemployment and tame inflation.
At the same time, personal income--comprising wages, interest and government benefits--held steady as Hurricane Floyd resulted in large, uninsured losses to residential and business property. It was the worst showing since December 1998.
In a speech Tuesday, Federal Reserve Chairman Alan Greenspan said profits from the sale of homes are playing a bigger role than the booming stock market in Americans’ spending spree.
Greenspan offered no hints as to what the Fed may do about interest rates at its next meeting Nov. 16.
On the auto front, European and Korean producers in particular recorded strong gains in U.S. sales.
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