WASHINGTON – U.S. consumers increased their spending in October even though their wages and salaries barely increased, raising questions about how strong the economy will grow at the end of the year.
The Commerce Department says consumer spending increased 0.3 per cent in October compared with September when spending rose 0.2 per cent. Wages and salaries rose a slight 0.1 per cent after a much stronger 1 per cent rise in September.
Overall income actually fell 0.1 per cent following a 0.5 per cent rise in September. But September’s gain was inflated by a legal settlement that boosted farm income that month, leading to a big decline in farm income in October.
The personal saving rate dipped to 4.8 per cent of after-tax income in October, down from 5.2 per cent in September, reflecting the difference between spending and income.