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.
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