Consumer Spending Fell 0.2% in October, Incomes Fell Flat
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Ryan McVay/Thinkstock(NEW YORK) — The economy took a hit last month as Superstorm Sandy pummeled through the East Coast, closing down major markets for days.
The Commerce Department reported on Friday that consumer spending declined $20.2 billion, or 0.2 percent, in October — the weakest showing since May. Personal income, meanwhile, fell flat, increasing by less than 0.1 percent.
Economist Diane Swonk told ABC News Radio that the latest figures were no surprise.
“We saw a hit in both salaries and wages as people could not get to work at the end of the month in a very important part of the country. We also saw a hit in consumer spending that was even larger. The biggest drop was in motor vehicle sales,” she said.
She said the blow could be attributed to where the storm hit.
“Not only was Superstorm Sandy, did it have major effects, major damages, but it also hit a very critical part of the U.S. economy, very populated area, that accounts for a lot of spending and economic activity,” Swonk said.
“Just New Jersey and New York alone can account for anywhere from 10 to 12 percent of retail sales in a given month. The island of Manhattan accounts for about 20 percent of all luxury retail spending in the country,” she added.
Copyright 2012 ABC News Radio