Wednesday, November 25, 2015

Personal Income increased 0.4% in October, Spending increased 0.1%

by Bill McBride on 11/25/2015 08:50:00 AM

The BEA released the Personal Income and Outlays report for October:

Personal income increased $68.1 billion, or 0.4 percent ... in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $15.2 billion, or 0.1 percent.
...
Real PCE -- PCE adjusted to remove price changes -- increased 0.1 percent in October, the same increase as in September. ... The price index for PCE increased 0.1 percent in October, in contrast to a decrease of 0.1 percent in September. The PCE price index, excluding food and energy, increased less than 0.1 percent, compared to an increase of 0.2 percent.

The October price index for PCE increased 0.2 percent from October a year ago. The October PCE price index, excluding food and energy, increased 1.3 percent from October a year ago.
The following graph shows real Personal Consumption Expenditures (PCE) through October 2015 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.

Personal Consumption Expenditures Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

The increase in personal income was at consensus expectations.  And the increase in PCE was below the consensus.

On inflation: The PCE price index increased 0.2 percent year-over-year due to the sharp decline in oil prices. The core PCE price index (excluding food and energy) increased 1.3 percent year-over-year in October.