Washington, DC, December 1, 2005--Personal incomes and spending rose modestly in October while inflationary pressures eased, according to the Commerce Department.
Personal incomes increased 0.4% in October, as expected, after a 1.7% gain in September that was skewed by the impact of Hurricane Katrina. Spending increased 0.2% in October.
Real (inflation-adjusted) spending increased 0.1% in October, the first increase in three months. Real spending had declined 0.4% in September.
Consumer prices rose 0.1% in October after soaring 0.9% in September. Prices have risen 3.3% in the past year, compared with a 3.7% rate in September.
The core personal consumption expenditure price index increased 0.1% in October, bringing the year-over-year increase down to 1.8% from 2% in September. It's the smallest year-over-year gain since February 2004.
Incomes from wages and salaries increased 0.6% in October, the biggest gain in three months. Proprietors' income fell 0.2% after soaring 4.8% in September. Income from assets rose 0.6%, including a 1% rise in income from dividends.
With incomes rising faster than spending, the personal savings rate improved to negative 0.7% from negative 0.8%. The record low was in August at negative 2.2%. The savings rate has been negative for six of the past seven months.
