Recent data from the Bureau of Economic Analysis showed increases of personal income and consumer spending by 0.5 percent and 0.2 percent, respectively, during the month of September.
Personal income increased $67.4 billion in September, and disposable personal income rose by $64.8 billion. The numbers exceeded economic forecasts of a 0.3 percent increase, and the Department of Commerce said the increase was due to a rise in government wages after the government shutdown, The Wall Street Journal reports.
Personal consumption rose just 0.2 percent, posting a smaller increase than the 0.5 percent reported in August. September marked the third consecutive month in which income gains outpaced consumer spending. Savings rose to 4.9 percent in September from 4.7 percent in August.
U.S. payrolls added an additional 204,000 jobs last month, far outpacing economists’ expectations. Private sector earnings posted slight growth, though hours worked declined, according to The Wall Street Journal.
The Department of Commerce also reported that gross domestic product increased at 2.8 percent in July through September—an increase from 2.5 percent in the second quarter, though growth was due primarily to businesses restocking shelves.
Inflation remained subdued, with the price index for personal consumption rising 0.9 percent from one year ago—less than 1.1 percent in August and below the Federal Reserve’s target of two percent, The Wall Street Journal reports.