Americans' incomes, meanwhile, increased by 1.7 percent in September, the largest gain since December 2004, boosted in part by post-hurricane insurance payments. The growth in income marked an improvement from the 0.9 percent plunge posted in August - a decline that largely reflected fallout from Katrina.

Even though the economy is weathering the storms, they certainly packed a punch. Uninsured losses to residential and business property reduced incomes by about $5 billion on an annualized basis in September and by about $240 billion, annualized, in August, the government estimated.

In September, consumers trimmed spending on big-ticket "durable" goods, such as cars. But they boosted spending on nondurables, such as food, clothes and gasoline, as well as on services, a broad category that also includes some energy-related things.

When consumer spending is adjusted for inflation, however, the spending picture looks softer. Overall spending dipped 0.4 percent in September after a 1 percent drop in August.

Still, despite the sting of high energy bills, consumers spent briskly in the third quarter as a whole. That helped the economy grow by an energetic 3.8 percent annual rate, the government reported last week.

Economists, however, expect that consumer spending probably will moderate in the final three months of this year as auto sales drop off with the waning of generous incentives and energy prices cause belt-tightening.

Chan and other analysts are hopeful that any moderation in consumer spending will be more than offset by stronger spending elsewhere, which should allow the economy to grow at a decent pace in the current October-to-December period.

Monday's report also showed that Americans' personal savings rate - savings as a percentage of after-tax income - stayed in negative territory in September at minus 0.4 percent. In August, the savings rate was negative 1.8 percent.

Katrina, the costliest natural disaster in U.S. history, struck in late August; Rita hit in late September. Both hurricanes destroyed businesses and homes, and choked the flow of trade. They also hobbled oil and gas facilities, driving energy prices higher and fanning fears of inflation.

An inflation gauge tied to Monday's report showed that prices - excluding food and energy - were up 2 percent in September from a year earlier.

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