WASHINGTON — Nominal personal consumption expenditures rose 0.6% in October, stronger than expected, while core PCE prices were up 0.1% for the month, slowing the year/year rate to 1.8% after rounding, according to data released by the Bureau of Economic Analysis Thursday morning.
The 1.8% year/year rate for core PCE prices, the lowest since March, follows downward revisions after rounding to the previous two months to 1.9%, and results partially from base effects due to a larger month/month rise a year earlier. The rate sits moderately below Fed's inflation target.
The 0.6% gain in current dollar PCE was above the 0.5% median expectation in an MNI survey and followed a 0.2% gain in September. Spending on durable goods was up 0.5% in the month, while nondurable goods spending rose 0.6% on a 2.4% increase in energy prices. Services spending was up 0.7%.
Real PCE was up 0.4% in October, as the overall PCE price index was up 0.2%. The overall PCE price index was up 2.0% year/year, unchanged from September, but down from the levels seen in the summer.
After inflation adjustment, durable goods PCE was up 0.4%, while real nondurable goods PCE was up 0.3% and real services PCE was up 0.5%.
Personal income rose by 0.5%, larger than the 0.4% gain expected, on an increase in wages and salaries as well as solid gains in proprietors' income, return on assets, and current transfer receipts.
The saving rate fell in October to 6.2% from 6.3% in September.
Personal taxes rose by 0.2% in the month after a 0.4% increase in September. As a result, disposable personal income rose by 0.5% after a 0.2% increase in September, while real disposable income was up 0.3%.
