Core PCE yy
- Prior was +3.9%
- PCE core MoM +0.3% vs +0.3% expected
- Prior MoM +0.1%
- Headline PCE +3.4% vs +3.4% expected (prior +3.5%, revised to 3.4%)
- Deflator MoM +0.4% vs +0.3% expected (prior +0.4%)
- Full report
Consumer spending and income for September:
- Personal income +0.3% vs +0.4% expected. Prior month +0.4%
- Personal spending +0.7% vs +0.5% expected. Prior month +0.4%
- Real personal spending +0.4% vs +0.1% prior
The upside surprises on consumption and headline PCE shouldn’t be a surprise after yesterday’s GDP (the high deflator in the report still doesn’t make sense) but the ongoing drop in core should give the Fed some comfort. That said, consumption has to slow down at some point if the Fed wants to get on top of inflation.