Consumer Spending Dropped In October

WASHINGTON (November 30, 2012)--Americans cut back on spending in October and and saw no growth in their income, reflecting disruptions from Superstorm Sandy, the U.S. Commerce Department said Friday.

The Commerce Department said consumer spending dropped 0.2 percent in October, down from an increase of 0.8 percent in September and the weakest showing since May.

Income was flat in the month following a 0.4 percent rise in September.

The government said work interruptions caused by the storm reduced wages and salaries by about $18 billion at an annual rate.

The storm affected 24 states, but the most severe damage was in New York and New Jersey.

The figures suggest economic growth will likely be weak in the October-December quarter.

Consumer spending drives nearly 70 percent of economic activity.

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