U.S. consumer spending up 0.3 percent in October

Published: Friday, Dec. 6, 2013 9:02 p.m. CDT
Caption
(AP photo)
A man sorts through cash after checking out at a Kmart in New York.

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.

Consumer spending increased 0.3 percent in October compared with September when spending rose 0.2 percent, the Commerce Department reported Friday. Wages and salaries rose a slight 0.1 percent after a much stronger 1 percent rise in September.

Overall income actually fell 0.1 percent following a 0.5 percent 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 percent of after-tax income in October, down from 5.2 percent in September, reflecting the difference between spending and income.

The rise in spending reflected gains in purchases of long-lasting manufactured goods such as autos and gains in spending on nondurable goods such as clothing and services such as rent and utilities. It meant a solid increase for the first month of the current quarter.

Consumer spending is closely watched because it accounts for 70 percent of economic activity.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reader Poll

How far will the Blackhawks advance in the playoffs?
Lose in first round
Lose in second round
Lose in conference final
Lose in Stanley Cup Final
Win Stanley Cup Final