WASHINGTON — Personal income rose 0.4% in September as expected, while the core PCE price index was on target with another 0.1% gain, keeping the year/year rate for core inflation growth at 1.3%, tying the slowest pace in two years, data released by the Commerce Department Monday morning showed.
The year/year rate of growth for September core PCE prices suggests no underlying inflation concerns before this week's FOMC meeting, as members look ahead to a possible rate hike in December.
Nominal PCE was up 1.0% in September, stronger than the 0.9% rise expected and the strongest pace since August 2009. Durable goods spending surged by 3.2%, lifted by very strong vehicle sales. Nondurable goods spending rose 1.5% on higher energy prices, while services spending was up 0.5%.
For income, there were gains were reported for all of the major categories, though the pace of growth for transfer receipts slowed. Wages and salaries were up 0.4% in the month as the decline in payrolls was more than offset by a 0.5% rise in earnings.
Disposable personal income rose 0.4% in the month, while real disposable income was flat. The saving rate fell to 3.1% in September from 3.6% in August, hitting the lowest point since December 2007.
The overall PCE price index was up 0.4% in September following a 0.2% gain in August. The year/year pace rose to 1.6% from 1.4% in the previous month.
Real PCE was up 0.6% in September following a 0.1% decrease in August. After inflation adjustment, durable goods PCE rose 3.5%, while nondurable goods PCE rose 0.3%, while services PCE was up 0.3%.
BEA said it could not quantify the impact of the hurricanes on the data, but did say it made adjustments to estimates where source data were not available.
