Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 18,570.85 53.62 0.29%
Nasdaq 5,100.16 26.26 0.52%
S&P 500 2,175.03 9.86 0.46%
Treasuries 1.57 0.00 0.32%
Data as of 11:04am ET
Company Price Change % Change
Chesapeake Energy Co... 5.39 0.42 8.45%
General Electric Co 32.06 -0.53 -1.63%
Bank of America Corp... 14.38 0.11 0.77%
Southwestern Energy ... 14.47 1.26 9.54%
PayPal Holdings Inc 37.42 -2.71 -6.75%
Data as of Jul 22
Sponsors

Sections

HSBC banker arrested at JFK airport as he prepared to leave the country. He and former trader face federal charges they manipulated currency trades. More

With one exception, every vice presidential candidate in the past 40 years has released a tax return. Given that Donald Trump hasn't released his tax returns, will Mike Pence be the second exception? More

The augmented reality app had more iOS downloads its first week than any other app in history. More