Sunday, October 31, 2010

Strongest Consumer Spending Growth Since 2006

The BEA reported today that real GDP grew at 2.0% in the third quarter, boosted by a 2.6% rise in inflation-adjusted consumer spending, the highest quarterly increase since the 4.1% growth in the fourth quarter of 2006, 15 quarters ago. This healthy growth in consumer spending from July through September is consistent with: a) the many states that have been reporting increases in tax revenues in the third quarter from sales, individual income and corporate income taxes, and b) the stronger-than-expected retail sales report for September (7.2% annual growth).