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.

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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.

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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.