Consumer spending probably picked up in October, and factories took more machinery orders, showing the US recovery strengthened entering the final quarter of 2010, economists said before reports this week.
Household purchases rose 0.5 per cent after a 0.2 per cent gain in September, according to the median estimate of 61 economists surveyed by Bloomberg News ahead of November 24 figures from the commerce department. The same day, another report from the agency may show bookings for durable goods excluding cars and aircraft climbed 0.6 per cent.
A better job market and bigger paychecks may give consumers the confidence to keep spending during the holiday season, broadening the economic rebound beyond manufacturing. Minutes from the Federal Reserve’s meeting this month may help explain why policy makers decided to begin supplying the world’s largest economy with an additional $600 billion in monetary stimulus.
“As businesses invest more and hire more, it fuels consumer spending in what we hope becomes a self-sustaining cycle,” said Russell Price, a senior economist at Ameriprise Financial Inc in Detroit.