WASHINGTON (UPI) — U.S. consumer spending rose 0.8 percent in September, twice the rate of incomes, the U.S. Commerce Department said Monday.
For the second consecutive month, spending, which climbed 0.5 percent in August, gained at its fastest pace since February. For the three months prior to August, spending rose an average of less than 0.2 percent per month.
Incomes rose 0.4 percent — $48.1 billion — and disposable income gained 0.4 percent or $43 billion. But when adjusted for inflation, disposable incomes was flat after dropping 0.3 percent in August, the Bureau of Economic Analysis said.
Private wages and salaries rose by $19.1 billion after rising by $4.1 billion in August and $9.3 billion in July.
With spending rising faster than incomes, the savings rate declined from 3.7 percent to 3.3 percent.
Consumers were also squeezed by rising prices, but the squeeze was relatively mild with prices up 0.4 percent for the second consecutive month in September.
Core prices, which exclude energy and food prices, rose 0.1 percent, the department said.
Stock markets were closed in New York Monday as the city braced for Hurricane Sandy, leaving investors a day to contemplate how to adjust to Monday’s report.
Economist had expected incomes to rise 0.4 percent and spending to rise 0.6 percent.