WASHINGTON - Personal income dipped 0.1%, while personal consumption increased 0.2% in September and the annual core PCE increased by the smallest in nine years, the Commerce Department reported.
Core PCE, which excludes food and energy costs, increased 1.2% for the 12 months ending in September, the smallest gain since a 1.1% increase in September 2001. Core PCE was flat in the monthly change from August, the first month without an increase since April.
The low inflation figure may compel the Federal Reserve to renew an asset purchase program. The Fed is widely expected to announce a second round of Treasury purchases at its meeting this week to stimulate inflation.
Core personal consumption expenditures increased 0.8% annually for the quarter ending Sept. 30, the Commerce Department announced last Friday. It was the smallest gain since the fourth quarter of 2008.
The increase for total PCE in September was the smallest gain since June.
Personal incomes declined 0.1% in September, skewed by unemployment compensation legislation, which boosted emergency government unemployment benefits in August. Excluding the emergency unemployment benefits, personal incomes increased 0.1% in September. Disposable personal income, which excludes taxes, fell 0.2%.
Economists expected consumption to increase 0.4% and for personal incomes to increase 0.2% for the month, according to the median estimate from Thomson Reuters.
Personal savings, disposable personal income minus personal outlay, fell to $607.6 billion in September, or 5.3% of disposable income. It was the lowest personal savings rate since March.
In August, income was revised down to a 0.4% increase from the originally reported 0.5% rise, while spending was revised up to a 0.5% increase from the originally reported 0.4% gain.
