WASHINGTON (AFP) - American consumer spending, the power behind the economy, rebounded in September as people unfolded fatter wallets in car showrooms, government data showed.
People forked out an extra 0.6 percent in the month, in line with most Wall Street forecasts, reversing a 0.1 percent dip in August, the Commerce Department said.
Consumer spending is crucial because it accounts for two-thirds of US economic activity.
Spending was up a solid 1.6 percent for "big ticket" durable goods such as cars and washing machines, up 0.5 percent for other, non-durable goods and up 0.4 percent for services.
Retail figures released two weeks earlier showed automobile dealers enjoyed a 4.2 percent boom in sales in the month.
People's incomes climbed 0.2 percent in the month, slightly below some Wall Street forecasts, after a 0.3 percent gain in August.
Disposable income -- income after tax -- edged up 0.1 percent.
A series of hurricanes, Charley, Frances, Ivan and Jeanne, which pounded the southeastern United States, detracted from incomes.
The Commerce Department said it estimated uninsured hurricane-related losses had cut rental income by an annual rate of 40.5 billion dollars in September and 13.6 billion dollars in August.
But net insurance settlements boosted "current transfer receipts from business" by 33.0 billion dollars in September and 13.6 billion dollars in August, it said.
"The personal income data were significantly impacted by the four hurricanes that hit Florida and the East Coast this year," said Wachovia senior economist Mark Vitner.
The bulk of the impact was in rental income, which tumbled 17.9 percent in September, after a decline of 9.0 percent in August, he said. There were also other "significant losses" in farm and other businesses' income.
"The net result shaved a few tenths of a percentage point of September income growth," Vitner said.
The slowdown in personal and disposable income reported for August and September had very little impact on consumer spending, he said. "The most important drivers of spending are wages and salaries, which rose solidly in both months."
Wages and salaries rose 0.4 percent in September and 0.3 percent in August, the Commerce Department said.
11/01/2004 - 17:44 GMT - AFP