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Personal income falls in September

By Charles Riley, staff reporter

NEW YORK (CNNMoney.com) -- Personal income registered an unexpected dip in September, while spending by individuals grew at a slower rate than expected, according to data released by the federal government Monday.

Personal income fell 0.1%, the Commerce Department said. The drop in personal income was a sharp reversal from a revised 0.4% increase registered in August.

According to the Commerce Department, spending by individuals increased by 0.2%.

Economists expected that spending by individuals would rise 0.4% in September, according to a consensus estimate from Briefing.com. Personal income was expected to tick up by 0.3% in the month.

The numbers were the result of a stubbornly difficult economy, according to Scott Hoyt, senior director of consumer economics for Moody's Analytics.

"The underlying takeaway is that conditions remain difficult for consumers, and as a result they are not spending much," he said.

Hoyt pointed to a steep decline in government social benefits as another reason for the drop in spending by consumers.

Those payments decreased by $21.5 billion in September, the result of unemployment compensation legislation, according to Commerce Department.

"These are payments that tend to get spent," Hoyt said.

Meanwhile, the savings rate dropped slightly from the previous month. According to the report, Americans saved $607.6 billion in September, a decrease from $642 billion in August. To top of page

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