September was the fifth consecutive month that U.S. personal income went up, posting an increase of 0.9 percent, the U.S. Bureau of Economic Analysis (BEA) reported on Friday (Oct. 30).
Personal spending was up by 1.4 percent in September, the report said. The increase in spending was led by clothing and footwear, along with new motor vehicles, the BEA said. In terms of services, the largest contributor to the increase in spending was healthcare.
“The increase in personal income in September reflected increases in proprietors’ income, compensation of employees, and rental income of persons that were partly offset by a decrease in government social benefits,” the BEA said.
The Wall Street Journal reported that economists had expected a 1 percent increase in spending and a 0.5 percent increase in personal spending.
U.S. gross domestic product (GDP) went up a record 7.4 percent over 2Q, according to the U.S. Commerce Department, per the news outlet.
“We see that consumers are still spending. In many cases, they are spending differently, meaning the composition of goods and services in their basket are different now,” Lindsey Piegza, chief economist at Stifel Nicolaus & Co., told the WSJ.
After the start of the Great Recession in 2007, it took nine years for incomes in the U.S. to start rising. According to 2016 data from the U.S. Census Bureau, poverty was starting to decline and employment gains were solidifying.
By 2019, median household income was up and poverty dropped 1.3 percent. A U.S. Census Bureau report showed an increase of almost 7 percent last year to $68,700, up from $64,324 in 2018.
As the pandemic continues to affect daily life, consumer confidence is off as the country heads in the holiday shopping season. The Conference Board’s consumer confidence index came in at 92.6 in July, missing expectations.