Americans are making, spending, saving more

By Charles Riley, staff reporter


NEW YORK (CNNMoney.com) -- With the holiday shopping season just around the corner, both personal income and spending are on the rise, the government said Wednesday.

Personal income rose 0.5% in October, after a revised unchanged report in September, according to data released by the Commerce Department. Spending by individuals ticked up 0.4% from a revised 0.3% the prior month.

Income was expected to increase by 0.4% in the month, according to a consensus estimate of economists from Briefing.com. The economists expected that spending by individuals would rise 0.6% in October.

"It's certainly good to see momentum pick up as we head into shopping season," said Tim Quinlan, an economist at Wells Fargo. "Retail data is the strongest in seven months."

Private sector wage and salaries were also up, increasing by $33.2 billion last month, much higher than the $8 billion increase reported in September.

But Americans aren't just spending their increased wages -- they are also saving.

Americans saved $651.1 billion in October, compared with $645.8 billion last month. Meanwhile, personal savings as a percentage of disposable income increased to 5.7% from 5.6% in September.

It may seem incongruous that Americans are both spending and saving more, but the increase in wages has been so substantial that it has allowed both numbers to rise, Quinlan said.

While corporate America is flush with cash, unemployment remains stubbornly high, and that is contributing to the rise in wages as companies divert funds to existing employees.

"Employers may be reticent to take the plunge and add another person to payroll," Quinlan said. "One byproduct is you see higher wages."  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,098.45 18.88 0.11%
Nasdaq 4,580.27 22.58 0.50%
S&P 500 2,003.37 6.63 0.33%
Treasuries 2.34 0.01 0.39%
Data as of 5:19am ET
Company Price Change % Change
Bank of America Corp... 16.09 0.08 0.50%
Apple Inc 102.50 0.25 0.24%
Intel Corp 34.92 0.27 0.78%
Facebook Inc 74.82 0.96 1.31%
General Electric Co 25.98 -0.03 -0.12%
Data as of Aug 29

Sections

The deal would value Vice at $2.5 billion. The online media company would also create content for the cable network, delivering a wider audience. More

Gas prices are falling to nearly $3 a gallon in some parts of South Carolina, and that will soon be common in much of the country. More

Netflix told the FCC that its speed on the Comcast network became so slow that customers began dropping their service. More

The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More

Five CNNMoney readers share stories about saving that you can learn from: What they would do differently if they had another chance. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.