ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, November 30, 1996 TAG: 9612020027
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
The bigger-than-expected increase translated into a rise of $27.5 billion at an annual rate. The bulk of that gain - $20.7 billion - occurred in purchases of services, led by increased spending to pay for home insurance, telephone bills, recreation and accountant fees.
Purchases of both durable and nondurable goods rose at an annual rate of $6.8 billion.
Economists are closely watching consumer spending, which accounts for two-thirds of total economic activity, to determine whether a sharp slowdown in economic growth which occurred in the summer will stabilize.
Consumer spending rose by just 0.6 percent at an annual rate in the third quarter, the slowest pace in five years, following growth in spending at 3.4 percent pace in the second quarter. This slowdown in spending caused virtually all of the slowdown in the economy over the summer.
Personal income growth was flat in October, the weakest showing since it was also changed in July. However, the October performance had followed two strong months of growth with gains of 0.6 percent in August and September.
Private wages and salaries actually decreased at an annual rate of $8.9 billion in October, following a gain of $28.2 billion in September. The October drop reflected a decline in average weekly hours, which more than offset an increase of employment during the month.
Disposable personal income, the amount of income left after paying taxes, was also unchanged in October after rising in September.
LENGTH: Short : 38 lines ILLUSTRATION: GRAPHIC: 2 charts by AP.by CNB