Instant view: Consumer spending up in Sept on savings

US Q3 wage growth slows, benefits up least since '99:

U.S. civilian employment costs rose much less than expected during the third quarter as wages and salaries posted their weakest growth in a year while benefits expanded at their slowest pace since 1999, government data showed.

COMMENTS:

KURT KARL, CHIEF U.S. ECONOMIST, SWISS RE, NEW YORK

"Very weak income but very solid consumption even though consumer confidence is in recession so that's good news for the economy. It's hard to sustain without more income growth. It's hard to keep it going into the fourth quarter and early next year. Part of the third-quarter growth is from a pickup in auto sales and production so you don't have a good feel on how fourth quarter. We don't have a great generator of growth anywhere in the economy. Exports are softening because the global economy is softening."

RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK

WAYNE KAUFMAN, CHIEF MARKET ANALYST AT JOHN THOMAS FINANCIAL IN NEW YORK

"Looks like a nonevent. I'm not getting much out of this, but it certainly doesn't look bad and the employment cost index being less than expected is good.

"The big news of the week was yesterday, and today we're seeing typical price action after that kind of move. We may see a consolidation over the next week, but then a sustained rally after that."

DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

"With income weak through Q3 and spending firm, the savings rate has fallen to 3.6%, its lowest since December 2007, and with confidence weak there must be doubts as to how much further savings can fall, meaning that without a pick up in income trends, spending is likely to slow."

MARKET REACTION:

STOCKS: U.S. stock index futures hold steady at lower levels.

BONDS: U.S. Treasury debt prices hold steady at higher levels.

FOREX: The dollar extends gains versus euro.