US consumer spending barely rose in August, underscores risks to economy

by   |  VIEW 231

US consumer spending barely rose in August, underscores risks to economy

On Friday, the 27th of September 2019, US Commerce Department had revealed another set of slanderous economic data highlighting a growing underlying risk on United States’ record 10-year long economic expansion, as US consumer spending remained almost flatlined on August amid an elusive business investment that failed to rose either in the wake of a withering Sino-US trade tensions which had been prodding economists and analysts to axe their economic growth projection for Q3, 2019.

Besides, casting further clouds on US economy, Friday (September 27th) had witnessed an unprecedented escalation of an already ratcheted up trade tension between United States and China, as US President Donald Trump alongside his administration was considering an entire delisting of China-based companies in the US stock exchanges.

Nonetheless, Friday’s (September 27th) consumer spending report had not been considered as a signal to a near-term recession as solid wage growth had still been supporting the United States’ consumer spending, but a persistent decline on working hours had added to analysts’ worries.

According to Friday’s (September 27th) consumer spending report of US Commerce Department, US consumer spending, responsible for more than two-thirds of the world’s largest economy’s financial activity, was inched up by 0.1 per cent on August, buoyed by an upsurge of sales of recreational goods alongside motor vehicles, however, a decline in restaurant and hotel spending in the middle of a tourism season had pointed towards further slowdown risks, suggested analysts.

Meanwhile, adding that the already divided Fed on rate-cut issue would likely to face off a double whammy on fourth quarter as money markets were anticipating another rate cut by the year-end, a senior economist at Wells Fargo Securities in Charlotte, North Carolina, Tim Quinlan said followed by the reveal of Friday’s (September 27th) US Consumer spending data, “We still expect the Fed will cut rates in the fourth quarter, but squaring this soft read on the consumer, business investment and a slight rebound in underlying inflation admittedly pulls the Fed in opposite directions. ”