By Amara Omeokwe


U.S. households increased spending 1.4% in September for the fifth straight month as higher pay and remaining pandemic aid helped boost incomes by 0.9%.

The Commerce Department said personal consumption expenditures--a measure of household spending on goods and services--rose in September. Consumers have increased spending since the summer, although the pace of gains slowed into early fall.

Personal income--a measure of what households receive from wages and salaries, government aid and investments--was up last month, after a sharp decline in August.

Economists surveyed by The Wall Street Journal expected a 1% increase in spending, and a 0.5% rise in personal income.

The pickup in personal income reflected an increase in employee compensation and the affect of a federal supplement to state unemployment benefits that provides recipients with an extra $300 weekly. The Commerce Department said August's drop in personal income was due mostly to the end of a separate program that provided a $600 weekly bonus to recipients of unemployment benefits.

On the spending front, consumers boosted outlays on autos, clothing, health care, fitness and entertainment services.

Richard Moody, chief economist at Regions Financial Corp., said spending trends have reflected an ongoing economic upturn, particularly among households that have seen limited job and income losses.

"You still think overall, consumer spending is going to continue to grow, just maybe not as strongly as it otherwise would have if either the labor market were fully healed or there having been another round of financial assistance," from the federal government, Mr. Moody said.


Write to Amara Omeokwe at


(END) Dow Jones Newswires

October 30, 2020 09:04 ET (13:04 GMT)

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