Personal spending posts record hike
WASHINGTON -- With an economy in recession, Americans attracted by free auto financing deals pushed their spending up by a record amount in October despite stagnant incomes, according to the U.S. Commerce Department.
The federal department reported that personal spending rose 2.9 percent in October, an all-time high, led by a record increase in purchases of autos and other durable goods.
The record-spending hike followed a large decline of 1.7 percent in September, when the U.S. economy came to a virtual standstill as Americans, stunned following the aftermath of the terrorist attacks, stayed out of the shopping malls.
The October spending increase surpassed the previous record of 2.6 percent, set in September 1986. Led by the huge jump in auto sales, sales of durable goods surged by a record 13.8 percent in October. Sales of nondurable goods posted a much smaller 0.5 percent gain while sales of services, the biggest spending category, increased 12 percent.