Personal Spending Up 0.7% in October, Incomes Up 0
Washington, DC, December 1—The Commerce Department reported that consumer spending rose in October as a surge in hiring led to the biggest rise in incomes in five months.
The department said that spending during the month rose 0.7 percent, following a 0.6 percent gain in September. Incomes rose 0.6 percent after rising 0.2 percent in September. The savings rate fell.
Wages rose in October as U.S. employers added 337,000 workers to their payrolls, giving consumers more money to spend and providing fuel for economic growth this quarter. Stronger-than-expected spending helped propel growth in the third quarter, the government said yesterday.
Economists had forecast spending to rise 0.4 percent and a 0.5 percent increase in incomes during the month.
Disposable income, or the money left over after taxes, rose 0.6 percent in October following a rise of 0.2 percent the previous month. Wages and salaries rose 0.5 percent for a second month.
The personal savings rate was 0.2 percent in October, the lowest since the same month in 2001, compared with 0.3 percent a month earlier.
Personal spending adjusted for changes in prices increased 0.3 percent in October after a 0.5 percent rise.
Spending on durable goods such as autos, furniture, and other long-lasting items, adjusted for inflation, rose 0.1 percent after rising 1.1 percent.
