Americans’ personal income rose 0.5% in September, despite a drop in farm income, while spending growth was the slowest since the October, 1987, stock market crash, the government said today.
The Commerce Department said income rose $19.9 billion to an annual rate of $4.10 trillion last month, following a weak 0.3% increase in August and a strong 0.7% jump in July.
Personal consumption spending, which includes everything except interest payments on debt, was flat in September at an annual rate of $3.26 trillion, following a 0.6% gain in August and a 0.4% increase the month before that.
It was the weakest month for spending since October, 1987, when it fell 0.2%. Analysts had attributed that drop to the shock from the stock crash.
With spending holding steady and income rising, Americans saved more in September than in any month since May. The personal savings rate was 4.2% last month, up from 3.8% in August.