After an upwardly revised September surge, US personal spending growth slowed to just 0.3% in October and with incomes rising more than expected (+0.6% vs +0.4% exp), it appears Americans were careful heading into the election as the savings rate surged from 5.7% to 6.0%.
However, the weaker than expected growth in spending will likely knock Q3 GDP revisions lower.
Both spending and income continue to rise…
But pre-Election it appears Americans were more cautious
Personal income increased 0.6 percent in October after increasing 0.4 percent in September. Wages and salaries, the largest component of personal income, increased 0.5 percent in October—the same increase as in September.
Current-dollar disposable personal income (DPI), after-tax income, increased 0.6 percent in October after increasing 0.4 percent in September. Real DPI, income adjusted for taxes and inflation, increased 0.4 percent in October after increasing 0.2 percent in September.
Real consumer spending (PCE), spending adjusted for price changes, increased 0.1 percent in October after increasing 0.5 percent in September. Spending on durable goods increased 1.0 percent in October after increasing 2.6 percent in September.
PCE prices increased 0.2 percent in October—the same increase as in September. Excluding food and energy, PCE prices increased 0.1 percent in October—the same increase as in September.
Personal saving rate: the personal saving as a percent of DPI was 6.0 percent in October and 5.7 percent in September.
This is the 7th month in a row of annual growth in spending topping income growth…
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