Personal income jumps in September; consumer spending growth slows
WASHINGTON -- Americans’ income jumped more than expected in September, but that didn’t help boost their spending as consumers shifted more money into savings, the Commerce Department said Friday.
Personal income increased 0.5% in September from the previous month. It was the second-straight month of growth at that rate, which has been the best pace since February.
Despite having more money in their wallets, consumers didn’t open them more in September. Consumer spending increased 0.2%, down from the 0.3% rate in August.
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Instead, people saved more money, possibly reflecting concerns about the government shutdown that was looming in October. The 16-day closure of many federal offices led to a delay in the release of the September personal income report.
The personal savings rate rose to 4.9% in September, from 4.7% the previous month. It was the highest rate of the year, though still historically low.
The slower growth in consumer spending helped keep inflation in check. The so-called core rate over the previous year held at 1.2% in September, well below the Federal Reserve’s target of 2%.
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