Cars and light trucks sold at a 14.9 million annual pace in September, the strongest since March 2008, according to Ward’s Automotive Group. Chrysler Group LLC and General Motors Co. reported gains.
Record-low mortgage rates are stoking demand for housing, another area of the economy that’s improving. Firming home prices and a drop in joblessness may further boost Americans’ confidence and spending.
Residential construction increased at a 14.4 percent rate, up from an 8.5 percent gain in the prior period, today’s report showed.
At the same time, consumers’ purchasing power eased, with disposable income adjusted for inflation rising at a 0.8 percent annual rate from July through September, the least since the end of 2011, after a 3.1 percent gain in the second quarter, today’s report showed. The saving rate fell to 3.7 percent from 4 percent.
Spending by the federal government also rebounded, led by a jump in defense outlays. It grew at a 9.6 percent rate, the most since the second quarter of 2010. Total public expenditures climbed at a 3.7 percent pace the most in three years.
One area of mounting concern is business investment and manufacturing.
Corporate spending on equipment and software was unchanged, the weakest reading in three years, today’s report showed.
Data yesterday showed orders for non-defense capital goods excluding aircraft, a proxy for future corporate spending on items like computers, engines and communications gear, stagnated in September and shipments fell.
Honeywell International Inc., a maker of turbochargers and cockpit controls, cut its annual sales estimate on weaker demand for aerospace parts and falling auto production in Europe.