In October, personal income growth accelerated to 0.4%, from its September growth of 0.1%. Consumers held on to the majority of this extra income, increasing their spending by only 0.1%. This marks a rapid deceleration form the 0.7% consumption growth in September.
With income growing more quickly than spending the savings rate edged up to 3.5% from a downwardly revised 3.3% in September. These levels remain extremely low as the savings rate was at 5.0% as recently as June.
Personal income rose more quickly than expected, adding $48.1 billion. This represents an acceleration in growth to 0.4%, the fastest level of growth since March. Real disposable income rose 0.3%, its fastest level this year.
Consumer spending growth slowed rapidly from 0.7% in September to 0.1% in October. This level of growth is much lower than the 0.35% average growth over the last 12 months.
Read the report.