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Consumer spending soars in September

Consumer spending soars in September

Consumer spending in the United States shot up 1 percent in September, according to the Commerce Department, its fastest increase in eight years. 

The $136 billion in consumer spending may be, in part, an aftereffect of hurricanes Harvey and Irma, which caused billions of dollars in damage. 

As recovery and rebuilding efforts pick up, those affected by the disasters spend money on items such as cars that may have been destroyed. Motor vehicle spending was up a whopping 14.7 percent. 

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But while spending on goods and services was up, disposable incomes were flat in real terms.

The news follows a Friday report showing that gross domestic product grew at 3 percent in the third quarter, despite the damage from the hurricanes. That was the second consecutive quarter in which the economy grew at 3 percent or more; second quarter growth was 3.1 percent. 

It was not the first time the economy has grown that quickly for two consecutive quarters since the 2009 global financial crisis, but the data was encouraging for the Trump administration. 

Administration officials have made achieving sustained 3 percent growth a goal and a regular talking point for their economic agenda.

The GOP, which is set to unveil its tax plan this week, says that tax reform will be a central driver of higher growth, though Democrats fret that gains will disproportionately favor the rich and cut benefits to the poor and middle class.