Consumer Spending Rebounds, Incomes Grow

Consumers got back into a buying groove and boosted their spending by a solid 0.5 percent in September. Incomes also grew briskly.

The latest figures, released Monday by the Commerce Department, suggested that the economy is holding up well to the double blows of Hurricanes Katrina and Rita.

The 0.5 percent rise in consumer spending in September came after spending fell by that amount in August, reflecting the hit from Katrina.

Americans' incomes, meanwhile, increased by 1.7 percent in September, the largest gain since December 2004. That marked an improvement from the 0.9 percent plunge in incomes in August _ a decline that largely reflected fallout from Katrina.

Spending growth for September matched economists' expectations. The increase in income was larger than forecast.

Consumer spending accounts for roughly two-thirds of all economic activity and is closely watched by economists.

Despite the sting of high energy bills, consumers spent briskly in the third quarter, helping the economy grow by an energetic 3.8 percent annual rate, the government reported last week.

Consumer spending in the July-to-September quarter reflected a big appetite for big-ticket durable goods, such as cars, which had been discounted and promoted to lure buyers.