U.S. consumer spending got off to a fairly firm start in the third quarter, rising by the most in five months and offering hope economic growth would pick up this quarter. Other data on Thursday showed the number of Americans filing new claims for jobless benefits held steady last week. The reports were consistent with only moderate economic and job growth, and they kept alive the prospect of additional monetary stimulus from the Federal Reserve. “The economy does not seem to be faltering or going into reverse,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi in New York. “(But) for a Fed that thinks the economy is not good enough, the data today is not consistent with 3 percent-plus growth or a falling unemployment rate.” Officials at the central bank are debating whether a third round of bond purchases is warranted to spur a stronger recovery, and investors will look to a speech by Fed Chairman Ben Bernanke on Friday for clues on the Fed’s next step. The Commerce Department said consumer spending increased 0.4 percent in July after a flat reading in June. The rise was in line with economists’ expectations.... Continue to read.
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