September Personal Income Up 0.5%; Spending Gains 0.2%

WASHINGTON — September Personal Income data showed income grew 0.5%, personal consumption expenditures rose 0.2%, and core PCE prices gained 0.1%.

The pattern for real PCE shows a flat July, followed by a 0.2% "surge" in August, and some slowing in September to a 0.1% rise. This suggests Q4 did not begin with any bang.

September savings jumped to a high since December, and the 4.9% saving rate was the best since last year. Savings has rebounded from the 1990s and early 2000s but remains well below the double-digit rates posted in the 1970s when interest rates were far higher.

Consumers saw a drop in private wages to +$18.8 billion in September, after +$34.8 billion in August, mainly reflecting a slowing in services pay ahead of the government shutdown in October.

Supplements, proprietors' income, rents, and income receipts all gained in September. Farm income was boosted $10.1 billion at an annual rate by a USDA discrimination payout, and this boost might have been considered one-time and thus saved.

The over-the-year gain in core PCE prices were up 1.2%, illustrating modest inflation.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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