The U.S. personal consumption expenditures (PCE) core price index fell short of market expectations in October, posting the second slowest growth of the year. Growth in personal consumption expenditure accelerated. The move raised hopes that the Fed might keep inflation under control without triggering a recession, even as it continues to raise interest rates.
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Bar graph is PCE core price index (month-on-month), line graph is real PCE (same)
Source: U.S. Department of Commerce, Bureau of Economic Analysis
Like the US Consumer Price Index (CPI) in October, the PCE price index showed that inflation had started to slow, although it was still fairly high.
Adjusted for inflation, real personal consumption expenditure increased by 0.5% from the previous month. The growth accelerated from the 0.3% increase in September, and it was the largest increase since January. PCE before adjusting for inflation increased by 0.8%. This is due to a strong labor market and continued wage increases.
Inflation-adjusted spending on goods jumped 1.1%. Increased car purchases boosted the overall figure. Service spending increased by 0.2%. Spending on accommodation and eating and drinking services increased.
Personal income increased by 0.7% from the previous month. Market expectations were for a 0.4% increase.
The savings rate fell to 2.3%, the lowest level since 2005.
See table for detailed statistics.
Original title:US Core PCE Prices Rise by Less Than Forecast; Spending Gains(excerpt), US Oct. Personal Spending Rose 0.8% M/m; Est. 0.8% (excerpt)
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