U.S. personal income, spending rose in October

NEW YORK — In one of several reports Thursday that painted a picture of a U.S. economy gaining strength, the government said personal income and spending edged up in October.

Other reports showed that construction spending rose that month and fewer Americans applied for unemployment insurance last week — all signs of a surprising resilience after one of the worst hurricane seasons on record.

But the nation's retailers reported mixed results for the month, suggesting that consumers may be holding out for even bigger price discounts before Christmas. Many of the winners last month were those that heavily discounted over the Thanksgiving weekend, including Wal-Mart Stores Inc., while sales growth lagged at Nordstrom Inc. and the Gap Inc.

"You had some very good performances by only a handful of stores, but you also had a fair amount of weakness. Most of the business was driven by promotions," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.

"More of the season's sales now ride on December, which is dicey because of the weather and promotional activity," which could hurt stores' profits, he said.

The UBS-International Council of Shopping Centers' November sales tally of 65 retailers rose 3.5 percent last month; the results matched Niemira's forecast but beat a meager 1.8 percent increase a year ago. The sales tally is based on sales at stores open at least a year, known as same-store sales.

"Energy pricing is still a concern," said Tom Kopanski, vice president of automation at Siemens Energy and Automation, an Atlanta-based unit of the German electronics giant Siemens AG. But "we are seeing a good level of confidence there. If you look at different (business) segments, our customers are telling us the demand is there."

Kopanski said his company, which makes electronics for metal cutting tools used by car and aircraft makers as well as technology for bottlers, has seen demand increase, suggesting that consumers are still willing to spend.

The Commerce Department reported that personal spending rose 0.2 percent in October, down from September's 0.5 percent gain but better than the 0.5 percent decrease in August when the Gulf Coast region was hit by Hurricane Katrina. Incomes rose 0.4 percent in October after being skewed for two months by the storm's fallout.