Personal Income:  Steady Income Growth, Spending Moderates After Auto-led Jump

Bottom Line: Personal income rose as disposable income rose modestly in October. Real consumer spending, which jumped sharply in September on hurricane-related auto buying, rose more slowly in October. It grew at 1.7% annualized, a slower rate than in the previous quarter, indicating consumers are still spending cautiously. Core PCE, the Fed's preferred inflation metric, grew 0.21%, 1.9% annualized in the last 3 months and 1.4% over the last 12 months. Personal Income ROSE by 0.4% in October, compared with market expectations for an increase of 0.3%. The prior month was revised higher from 0.40% to 0.42%. Personal Income is now 3.4% ABOVE its year ago level. Wages and Salaries ROSE by 0.3%, Wages are now 3.7% ABOVE year ago levels. Personal Tax Payments FELL by 0.0% and are now 4.3% ABOVE their year ago level, reflecting the year-on-year changes in employment and income. Disposable Income ROSE by 0.5% and is now 3.2% ABOVE its year ago level. Consumer Spending ROSE by 0.3%, compared with market expectations of an increase of 0.3% The prior month was revised lower. There were small decline in durable goods, small increases in nondurable goods spending and small increases in services spending. Spending is now 4.2% ABOVE its year ago level. The Saving Rate ROSE by 0.20 points to 3.2%. The PCE Price Index ROSE by 0.1% and is now 1.6% ABOVE its year ago level. Meanwhile, the Core PCE Index ROSE by 0.2% and is now 1.4% ABOVE its year ago level. Real Consumer Spending ROSE by 0.1% and is now 2.6% ABOVE its year ago level. The October level is 1.7% annualized above its Q3 level.