Consumers boosted their spending by 1% in September, the biggest monthly gain in eight years. The surge was led by strong sales of autos and other durable goods.
The sizable jump in consumer spending was up from a tiny 0.1% gain in August and was the best showing since an increase of 1.3% in August 2009, the Commerce Department reported. Income growth was also solid in September, rising by 0.4% as wages and salaries climbed.
Consumer spending is closely monitored because it accounts for 70% of economic activity. The latest result suggests that Americans were feeling increasingly confident about the economy at the end of the third quarter.
That should boost growth in the final three months of the year. The overall economy, as measured by the gross domestic product, grew at a solid 3% annual rate in the July-September quarter, despite the devastation from two hurricanes. It was the first time in three years the economy posted back-to-back quarterly gains of 3% or better.
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