
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, November 1, 1994                   TAG: 9411010083
SECTION: BUSINESS                    PAGE: C-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

TAKE-HOME PAY UP; SAVINGS, TOO

Americans were taking home more pay and saving more, too, in September, as the strongest gain in incomes since April easily outpaced consumer spending.

Analysts said the Commerce Department figures released Monday are in line with an economy that continues to expand at a steady, moderate rate.

The Commerce Department said incomes climbed 0.6 percent in September - the eighth straight increase - while spending rose just 0.2 percent, the weakest showing since it dropped 0.3 percent in April.

``The income numbers look quite solid,'' said economist Lynn Reaser of First Interstate Bancorp in Los Angeles. ``Consumers took somewhat of a breather in September.''

The income data was a little stronger than many analysts had expected and spending was a little lower.

The new data meant that Americans' savings rate - savings as a percentage of disposable income - was up to 4.1 percent in September, from 3.7 percent the previous month.

``Consumer spending is not the mover of the economy now. It's the follower,'' said Laurence Meyer, who heads a St. Louis forecasting firm. He noted that auto sales, after a particularly strong August, leveled off in September and helped hold down overall spending.

Spending, which accounts for two-thirds of the nation's gross domestic product, was up for the fifth straight month and seven of the past eight.

The Commerce Department also said disposable income - income after taxes - climbed 0.6 percent in September.

Private wages and salaries, the most closely watched component of income, increased at a $15.2 billion annual rate after a $5.1 billion rise in August. Government wages and salaries rose at a $1.5 billion rate after gaining $1.2 billion the previous month.

Spending on long-lasting items such as cars and appliances declined 0.3 percent to a seasonally adjusted annual rate of $602.8 billion. Spending on non-durable goods such as food and fuel rose 0.3 percent to $1.406 trillion, and spending on services was up 0.2 percent to $2.665 trillion.

Incomes rose to a seasonally adjusted annual rate of $5.757 trillion from $5.724 trillion.

The income and spending figures were not adjusted for inflation. When adjusted, disposable incomes rose 0.4 percent in September, while spending was unchanged.

by CNB