Disposable income, or the money remaining after taxes, rose 0.4 percent in October from the prior month after adjusting for inflation. It was up 3.9 percent over the past year.
The saving rate which measures the share of a person’s disposable income that is saved, climbed to 5.6 percent, the highest since December 2012, from 5.3 percent in September.
The price index for personal consumption expenditure, Fed’s preferred inflation gauge, rose 0.1% from September and climbed only 0.2% from a year earlier. It is 42nd consecutive month in which prices have fallen short of the Fed’s 2 percent annual target. Excluding the volatile food and energy categories, the price measure was little changed from September and rose 1.3 percent in the 12 months ended in October.
Wages and salaries increased $45.0 billion in October, compared with an increase of $2.5 billion in September. Private wages and salaries increased $43.0 billion, compared with an increase of $1.5 billion. Government wages and salaries increased $2.0 billion, compared with an increase of $1.0 billion.