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WEDNESDAY November 26, 2008 CONSUMER SPENDING DECLINES IN OCTOBER Personal income rose 0.3 percent in October, after rising 0.1 percent in September. Wages and salaries, the largest component of personal income, rose 0.1 percent after falling 0.1 percent in September. The effect of Hurricane Ike was small. (See the “Disasters” FAQ on the BEA Web site.) The Economic Stimulus Act of 2008 had a negligible effect on personal income in these months. Real disposable personal income (DPI), income adjusted for inflation and taxes, rose 1.0 percent in October after remaining flat in September. Excluding the effects of the 2008 Stimulus Act, real DPI grew 0.1 percent in September. Real consumer spending (personal consumption expenditures) fell 0.5 percent in October, led by reduced spending on motor vehicles and energy. Average growth, last 12 months September October Personal Income 0.3% 0.1% 0.3% Real DPI 0.0% 0.0% 1.0% –0.1 % –0.4% –0.5% 0.3% 0.1% –0.6 % Real PCE PCE Prices PCE prices fell 0.6 percent in October. Excluding food and energy, price growth was flat in October. 12-month September October average Personal saving as a percent of disposable income was 2.4 percent in October. Personal Saving Rate 1.2% 1.0% 2.4% Real Disposable Personal Income and Real Consumer Spending 2.0 Percent change (monthly) 1.5 1.0 Real Disposable Personal Income 0.5 0.0 -0.5 -1.0 Real Consumer Spending -1.5 -2.0 July Aug Sept Oct BEA data—including GDP, personal income, the balance of payments, foreign direct investment, the input-output accounts, and economic data for states, local areas, and industries—are available on the BEA Web site: www.bea.gov. E-mail alerts are also available. NOTE: On December 24, 2008, the November estimates of Personal Income and Outlays will be released. Contact: Ralph Stewart 202–606–2649 Bureau of Economic Analysis, U.S. Department of Commerce