A sales associate helps customers as they consider the purchase of a big-screen television at a Costco warehouse on Wednesday, Nov. 18, 2020, in Sheridan, Colo. U.S. consumer confidence fell to a reading of 96.1 in November as rising coronavirus cases pushed Americans’ confidence down to the lowest level since August. The Conference Board said the November reading represented a drop from a revised 101.4 in October. (AP Photo/David Zalubowski)
By Martin Crutsinger
U.S. consumers increased their spending by a sluggish 0.5% last month, the weakest rise since April, when the pandemic first erupted, and a sign that Americans remain wary with the virus resurging across the country and threatening the economy.
The October gain reported Wednesday by the Commerce Department followed a seasonally adjusted 1.2% increase in September. It suggested that consumer spending, the primary driver of the U.S. economy, is being restrained by a weakened economy and by the failure of Congress to provide another stimulus package to struggling individuals and businesses.
The government's report also showed that income, which provides the fuel for spending, fell 0.7% in October.
With new viral cases accelerating across the country, many states are adopting or considering new restrictions on businesses. Sales at restaurants and bars fell in October for the first time in six months. Restaurant traffic declined further this month, according to the reservations provider OpenTable. Hotel occupancy is down from a month ago. Consumer spending on credit cards dropped in the first week of November from a month earlier, according to data compiled by Opportunity Insights.
Economists warn that consumer spending could falter further in the current October-December quarter given that many of the major government support programs have expired and Congress has yet to renew the assistance.
“With coronavirus infection rates soaring, states re-imposing restrictions and the ... data on in-person dining and jobless claims beginning to show signs of weakness, we are increasingly worried that the monthly gains in consumption will be weaker," Paul Ashworth, chief U.S. economist at Capital Economics, wrote in a research note.
The report showed that while the wages-and-salaries component of consumer income rose 0.7% in October, government transfers — the category that includes unemployment aid and other benefits — fell 6.2%.
Inflation, as measured by a gauge tied to consumer spending, was unchanged in October. Measured year over year, it's up just 1.2%. That is far below the 2% annual target set by the Federal Reserve, and it gives the Fed further leeway to supply support to the economy beyond the ultra-low interest rates it is already providing.
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
