WASHINGTON - Personal spending declined 0.5% in September, in line with analysts’ estimates, while core PCE was up 0.1% in the month, as consumption expenditures retreated from an eight-year high in August, the Commerce Department reported today.
The September decline was the largest decrease since December 2008 and followed an upwardly revised 1.4% increase in personal spending in August. PCE was initially reported up 1.3% for August.
The popular “cash for clunkers” program, which ended Aug. 24, drove August PCE to the largest monthly increase since October 2001. Purchases of motor vehicles and parts accounted for most of the decrease in September and most of the increase in August, the report said.
Personal income was flat in September following a 0.1% increase in August.
Core PCE, which excludes food and energy expenditures, rose 0.1% in September and rose 1.3% from a year ago. Total PCE is down 0.5% from a year ago.
Economists expected consumption to drop 0.5% in September and for incomes to be flat, according to the median estimate provided by Thomson Reuters. The core PCE deflator was expected to be 0.2%.
The GDP report released on Thursday showed core PCE rose 1.4% in the third quarter.
