Personal Income and Spending Rise in September

Washington, DC, November 1, 2007—Personal spending rose 0.3% in September after a revised 0.5% gain in August, according to the Commerce Department.  Personal income during the month was up by 0.4% for a second month in a row.

Economists were expecting spending to increase 0.4%. The gain in income matched forecasts.

The report's price gauge, personal consumption expenditures excluding food and energy, the Fed's preferred measure, rose 0.2% in September after a 0.1% gain the previous month. It was up 1.8% from September 2006, matching the August increase as the smallest since early 2004.

Because the increase in spending was smaller than the gain in incomes, the savings rate rose to 0.9%, from 0.8% in August.

Disposable income, or money left over after taxes, increased 0.4% after a 0.5% gain.

Inflation-adjusted spending on durable goods, such as autos, furniture and other long-lasting items, rose 0.4% and purchases of non-durable goods increased 0.3%. Spending on services, which includes utilities and accounts for almost 60% of all outlays, dropped 0.1%, the first decline since May.