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Personal Income: Modest Growth Continues; Core PCE YoY now 1.7%

October 31, 2016
Bottom Line: Personal income and disposable income rose modestly in September. Real consumer spending rose modestly in September, led by purchases of durable goods, increasing by 0.8% annualized, a lower rate than the previous quarter, indicating consumers are still spending cautiously. The Q3 spending average was 2.1% annualized above its Q2 level, confirming the consumption component of Friday's GDP report. Finally, core PCE was higher by 0.1%, bringing the annual rate over the last 12 months to 1.7%, modestly higher than 2015's rate of 1.4% and 2014's rate of 1.5%.

Personal Income ROSE by 0.3% in September , compared with market expectations for an increase of 0.4%. Personal Income is now 3.2% ABOVE its year ago level.

Wages and Salaries ROSE by 0.3%, Wages are now 3.8% ABOVE year ago levels. Personal Tax Payments ROSE by 0.5% and are now 1.8% ABOVE their year ago level, reflecting the year-on-year changes in employment and income.

Disposable Income ROSE by 0.3% and is now 3.4% ABOVE its year ago level.

Consumer Spending ROSE by 0.5%, compared with market expectations of an increase of 0.4% The prior month was revised lower. There were modest increases in durable goods, modest increases in nondurable goods spending and small increases in services spending. Spending is now 3.7% ABOVE its year ago level.

The Saving Rate FELL by 0.1 points to 5.7%.

The PCE Price Index ROSE by 0.2% and is now 1.2% ABOVE its year ago level. Meanwhile, the Core PCE Index ROSE by 0.1% and is now 1.7% ABOVE its year ago level.

Real Consumer Spending ROSE by 0.3% and is now 2.4% ABOVE its year ago level.

The Q3 spending average was 2.1% annualized above its Q2 level.