WASHINGTON – Consumers bought fewer big-ticket items such as cars, appliances and office equipment last month as their personal income rose just 0.3%, the Commerce Department reported today.
Orders for manufactured durable goods fell 6.2% to $193 billion, the third consecutive monthly decline and the largest drop since October 2006. In September, those orders fell 0.2%.
The department said orders for transportation equipment experienced the largest drop-11.1% to $49 billion. Shipments of manufactured durable goods fell for the third consecutive month. They declined 2.4%. Inventories of manufactured durable goods increased 0.4% to $34.1 billion, the highest level since 1992.
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The department noted that inventories have increased during 15 of the past 16 months, an indicator of the country's economic difficulties. In a separate report on income, the department reported that the increase in personal income was the third consecutive monthly rise following October's decline of 0.8%.
Disposable income rose 0.4%, the second consecutive monthly increase. Consumers were not, however, spending money, a fact reflected in the 1% decline in personal consumption expenditures, the fourth consecutive monthly fall.
The department attributed part of the sluggish income growth to the lingering effects of Hurricane Ike, which struck parts of the Gulf Coast in September and caused extensive damage. Private companies spent $3.9 billion more on wages and salaries in October, compared with $6.6 billion decline in September. The bulk of the increase was in service-producing industries and government, which saw increases of $5.6 billion and $4.5 billion, respectively. By contrast, manufacturing payrolls fell $.6 billion, an improvement over September when those payrolls fell $3 billion.
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