Democrats hail jump in consumer spending (updated)

[ProSense]

Democrats hail jump in consumer spending

By Eric Zimmermann - 11/25/09 10:08 AM ET

Consumer spending ticked upward in October in a marked reversal from the previous month, according to a Commerce Department estimate Wednesday.

The 0.7% increase--0.4% when adjusted for inflation--follows a 0.6% decline in September.

Democrats immediatly seized on the news, hoping to beat back Republican attacks that the party in power has failed to guide the economy through recession.

<...>

Meanwhile, claims for unemployment benefits fell last week to their lowest level in over a year, giving Democrats another piece of data to tout in the days ahead.

The good news comes a day after some dour reports. Commerce on Tuesday re-adjusted estimates on third quarter growth, reporting that the economy grew at a 2.8 percent clip between July and October, not the 3.5 percent growth initially estimated. Separately, the Federal Reserve predicted unemployment would remain high for several years.

more

Updated to add:

Statement From Commerce Under Secretary Rebecca Blank on Personal Income and Outlays in October 2009

WASHINGTON—The U.S. Commerce Department’s Bureau of Economic Analysis today released personal income and outlays for October 2009. Personal income rose 0.2 percent, real disposable personal income increased 0.2 percent and real personal consumption expenditures advanced 0.4 percent.

“Consumer spending began the fourth quarter with a favorable gain. Motor vehicles sales rebounded from their September fall after the ‘Cash for Clunkers’ program ended, and other purchases increased as well. The strength of the holiday sales is not clear yet, but strong growth in government benefits and a large drop in personal taxes so far this year have enabled households to increase spending and also improve their financial position by paying down debt,” said Commerce Under Secretary Rebecca Blank.

[AllentownJake]

1. Pro don't take this personally

Have a Happy Thanksgiving

This was a fair and accurate post, included all relevant data and paints an accurate picture of the real world. Good Job.

[ProSense]

21. Take your own advice

Happy Thanksgiving

:)

[Cha]

2. Awww, somebody doesn't want this news to get out.

Darn, and it sounds like progress.

[AllentownJake]

3. Actually it was widely reported by the media today

Why would the media not want to report good economic news the weekend before Black Friday?

The people having those sales, pay their bills.

[Cha]

4. That's great news! I was refering to the

"unrecs" that were applied to this OP.

[AllentownJake]

6. Didn't come from me

Pro reported all the relevant facts about what was in the report.

[Cha]

13. I know.

[CoffeeCat]

8. We're all being greased right now...

Little green shoots are positioned as "Dear Sweet Josephine!!!! Happy days are here again! AGAIN I TELL YOU!!".

This is being done so we'll all go out and spend, spend, spend and put lots and lots of things on our credit cards.

We may have some glimmers. However, we are a long way from being out of the woods.

It will be interesting to see how the holiday shopping shakes out.

[AllentownJake]

11. Credit Cards didn't buy into that plan

They jacked up everyone's rate last month and this month.

No they aren't going to have a good year this year or the next year or the year after that. America is about to undergo some behavioral changes.

Read an article today banks are trying to find a way to jack up their debit card fees since more people are turning to them, and cash.

[ProSense]

14. People are using them less.

Credit card usage to drop this holiday season: NRF

By Alexandria Sage

SAN FRANCISCO (Reuters) - The appeal of using credit cards this holiday shopping season will be lower as issuers slash credit limits and a growing number of consumers choose to pay for gifts with cash or debit cards.

The number of U.S. shoppers using credit cards this holiday season is expected to decline 10.1 percent this year, making up 28.3 percent of shoppers versus 31.5 percent a year earlier, according to a survey released on Tuesday by the National Retail Federation (NRF) and BIGresearch.

Cash as a payment method is making up the difference, with a quarter of shoppers expecting to use their greenbacks, up 9.1 percent from the 2008 holiday season.

The survey's results point to a strengthening trend in the payments industry, in which consumers have moved away from credit and turned to cash or debit cards in an attempt to better control their finances and spend within their means.

"With many holiday shoppers focused on spending within their limits, it's no surprise that fewer people will be relying on credit cards this year," said Tracy Mullin, chief executive of the NRF, in a statement.

Investors are waiting for signs of a consumer recovery this holiday shopping season after a financial crisis in 2008 yielded the worst retail sales results in decades.

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The OP is a reflection of a rise in personal income and people making the decision to spend...mostly cash.

[AllentownJake]

16. No disagreement

People are going to spend money this Christmas, not as much as they have spent before, but they aren't going to charge it and pay it off for 6 months.

That isn't a bad thing. Reducing overall consumer debt is good for the long term health of the country.

[CoffeeCat]

27. Those credit-card companies...

...understand very well that Americans have changed behaviors--as you pointed out.

They understand this is psychology. That's why they attempt to manipulate us into
spending like crazy people again. If all of us who have been saving and paying
down those cards--would just get cajoled into going wild with our cards again--life
would be much better for these companies.

They know we're weak. They snookered us into purchasing crapola that we couldn't afford. That
ploy went on for a long, long time. They think we're stupid. We are like objects to them.
Objects to be exploited and pilfered of our last dime. So, if they can persuade the media to
gin up it's dissemination of "feel-good" stories on the economy--in order to lull us into
a spending frenzy--that's a victory to them.

I do think that Americans are changing their behavior. I think some of it is people taking the
lamp shades off their heads and realizing that the party is over. However, I think many
people are unemployed, afraid of losing a job or dealing with a pay cut. So, they really
haven't had an epiphany--they're just being forced to spend less. That's why the corporations
work though the media so much--trying to paint a rosy-economic scenario that is NOT rosy. They
figure we just need some positive stories to get us feeling all spend-happy again.

I don't think this holiday season will be good for retail AT ALL. I think this is a critical
time for retailers. Many are in trouble. I'm a Black Friday fan and I'm just not seeing the deals
this year. Nothing is interesting. Nothing appeals to me. I've got kids and money to spend
for presents--but I'm just not seeing a lot of deals that would spark massive buying. Many
previous years were much better.

The coming days will definitely be interesting!

[optimator]

5. hooray for consumption and personal debt !

great economic news !:sarcasm:

[ProSense]

7. So now spending is bad news and Obama's fault?

What about the increase in personal income? Bad news?

[AllentownJake]

9. It wasn't negative

that was the good news, people have been having their incomes cut by reduced hours.

Flat right now is acceptable.

[ProSense]

10. It was positive

No spin: positive.

[AllentownJake]

12. Slightly positive

why are you going to pick a fight when I'm agreeing with you for once.

[ProSense]

15. Slightly positive is

some good news and some mixed. The news was positive across the board. Why can't you accept good news instead of trying to spin it?

[AllentownJake]

18. I said good news

Honeslty Pro, I think you are letting some of our past arguments interfere what you are reading me say in this thread.

I even said this was a Good OP and wished you a Happy Holiday.

[ProSense]

19. Seriously, stop flattering yourself

discuss the issue at hand. It isn't personal. The news was positive. Discuss the news and stop injecting personal assessments into the discussion.

[AllentownJake]

20. I did

When people are working reduced hours what is going to happen first, hiring or restoration to normal working hours? People start working normal hours personal income rises. This makes sense, and is good news.

The labor report today was mixed and I think they overly Seasonally adjusted it, we aren't out of the woods, but that report on personal income slightly increasing is a positive sign.

Good news.

You really want a fight over this?

[Cha]

17. That's not what was written about in the OP.

It's good news that people have money to buy necessities and whatever to keep others in their jobs.

[ProSense]

22. Obviously, that doesn't matter

to some people.

[Cha]

23. Just thought I would explain it

real slowly.

[ClarkUSA]

24. Good news. The recovery from eight years of BushCo is trending upward two important indicators.

:)

[andym]

25. K&R

It's amazing how well the economy appears to be doing considering the doom of last year. If people keep spending, employment should begin to rise sharply soon.

[Cha]

26. Kick for good news.

[HughMoran]

28. I know I'm spending money like crazy

I just can't not spend any more. I hope things do pick up as I am betting that it will (spending money on business expenditures.)