Consumer spending, which makes up more than two-thirds of the economy, increased 0.8% in October, following an unrevised 0.6% increase in September. Retail sales grew 1.3% month-over-month in October, driven by increased purchases of expensive everyday staples such as gasoline and food. This suggests that households are not cutting back on their spending despite growing worries about the recession.
Moreover, the economy grew at a 2.9% annual rate in the third quarter, and the fourth-quarter GDP estimates raised. The Atlanta Fed increased its fourth-quarter GDP growth estimate to a 4.4% annualized rate from 4%.
