Household consumption, which accounts for almost 70 per cent of the economy, grew at a 3 per cent annualized rate, less than the previously estimated 3.2 per cent.
The good news for consumers is that incomes are picking up. Wages and salaries rose by $102.7 billion in the third quarter following a $109.4 billion gain in the April through June period that was almost $62 billion larger than previously estimated.
After-tax total personal incomes adjusted for inflation climbed 3.8 per cent in the third quarter from the same time in 2014, the biggest year-to-year gain since the end of 2012. That help push the saving rate up to 5.2 percent from 5 percent in the second quarter, indicating consumers have plenty of cash to spend for the holidays.
Last quarter's growth reading was at odds with data on total earnings. Gross domestic income, which reflects all the money earned by consumers, businesses and government agencies climbed at 3.1 per cent rate from July through September following a revised 2.2 per cent advance in the second quarter that was stronger than previously estimated.
Steady growth in the world's largest economy is helping to create jobs and push down the unemployment rate, which Federal Reserve policy makers are watching as a gauge of how much slack is left in the labor market. Fed officials are considering raising their benchmark interest rate as soon as next month, should data continue to indicate that the US economy can withstand tighter monetary policy.
Unemployment fell to a seven-year low of 5 per cent in October and payrolls climbed by 271,000. Fed officials are likely to conclude when they meet next month that the economy is strong enough to handle the first increase in interest rates in nearly a decade. (SH)
Fibre2Fashion News Desk – India
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