Consumers spend more despite stagnant incomes

Consumers spent more in September, although wages remained stagnant, a government agency reported Friday. 

Consumer spending was up 0.6 percent last month, an increase of $68.7 billion — triple the 0.2 percent increase in August — while incomes rose only 0.1 percent in September after falling by the same amount in August, the Commerce Department said Friday. 

Adjusting for inflation, real disposable income decreased 0.1 percent in September, compared with a decrease of 0.4 percent in August. 

All told, consumers who stockpiled their savings during the recession saved less last month, with the rate falling to 3.6 percent, the lowest level since the recession started in December 2007.

Consumer spending represents 70 percent of economic activity and is a key component to the flagging recovery. 

Purchases of cars drove spending, helping to boost economic growth in the third quarter to an annual rate of growth of 2.5 percent — still below what’s needed to lower high unemployment, but the best three-month showing this year. 

Clothing sales were up 1.1 percent while purchases such as utility payments were up 0.2 percent, as consumers paid to cool their homes during an unusually hot summer. 

The government releases the October employment report on Nov. 4. The economy added only 103,000 net jobs in September.