Fatter Wallets For Americans

Americans' personal income in October posted its biggest jump in more than five years and rose more than twice as fast as spending.

Personal income - which includes wages, interest and government benefits - surged by 1.3 percent in October from September's level, the Commerce Department said Friday. It was the biggest leap in personal income since a matching 1.3 percent increase in April 1994 and was topped only by a 3.3 percent increase in March 1993.

Income was boosted by several factors including a big jump in federal subsidy payments to farmers and union contract signing bonuses for some manufacturing industries, the government said.

However, excluding these factors, personal income would have gone up by 0.5 percent, in line with analysts' expectations.

In September, income was flat, reflecting uninsured property losses from Hurricane Floyd. Nevertheless, spending rose in September by a strong 0.5 percent.

The gain was much bigger than the 0.6 percent increase many analysts were expecting.

Spending, meanwhile, rose a brisk 0.6 percent October, more than the 0.3 percent increase many analysts were expecting.