The personal saving rate rose to 8.3% in September, the highest since March. Adjusted for inflation, disposable income rose 0.3% following a 0.5% gain.
The report also said special payments to farmers -- begun after the trade war with China hit the agriculture sector -- gave a “substantial” boost to farm proprietors’ income in August and September.
Other data Thursday showed the Labor Department’s employment cost index, a broad gauge monitored by the Fed, rose 0.7% from the prior quarter, matching projections. The gauge increased 2.8% from a year earlier, as wages and salaries for private workers increased 3% for a third straight period. A tight labor market pushes companies to increase wages and benefits which could ultimately spur broader inflationary pressures.
Compensation gains were broad-based across sectors, with stronger increases in construction, finance and sales. The government’s quarterly ECI reading covers employer-paid taxes such as Social Security and Medicare along with other benefits.
The update follows Wednesday’s release of third-quarter GDP, which showed growth held up at a 1.9% annualized rate on unexpectedly strong consumer spending. The October jobs report Friday will give more detail on whether the labor market will keep propping up spending.
This article provided by Bloomberg News.