According to a report from CNBC consumer spending increased by 1.4% in the month of September. Previously, in the month of August we saw an increase of consumer spending of 1%. These numbers were promising since consumer spending accounts for two thirds of economic activity. However, as COVID cases are beginning to surge again there is a high possibility of consumer spending decreasing in the fourth quarter. Personal income increase by 0.9% which exceeded the 0.4% expected increase. Due to everything going on I think consumer confidence will fall and as a result consumer spending will also fall in the following quarter.
2 comments:
I agree with you, as we see the numbers going up, we will see a fall in consumer spending in the following quarter, as we dont have cure for the virus yet and the number are climbing little by little. Eventually this will become more worse unless we get a vaccine for it.
It will be interesting to see if consumer confidence will drop enough to offset the historic raise in spending during quarter 4. I believe we will likely have a stimulus by the end of the year, but generally quarter 4 has high spending due to the holiday season. With October being a poor performing month in the market, it is likely to see a decrease in spending, but I would not be surprised if it stayed relatively flat in comparison to Q3.
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