Consumers Entered The Holidays With A Bit Of Extra Cash [Video]

U.S. households went into the holidays with a bit more cash in their pockets than forecasters had expected despite an uptick in inflation in October.

That’s according to a report Wednesday from the Bureau of Economic Analysis on personal income and expenditures. The report showed that personal income rose 0.6% over the month, the biggest jump since March.

The increase was double the 0.3% that forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The same report showed inflation, as measured by the Personal Consumption Expenditures (PCE) price index, rose 2.3% over the year ending in October, up from 2.1% in September and in line with forecasts.

Household budgets gained ground in October in the tug-of-war between pay raises and price increases that determine buying power. Inflation-adjusted after-tax income rose 0.4%, the highest since January, after staying flat all summer and rising just 0.1% in September.

Some economists …