Personal income decreased $10.8 billion, or 0.1 percent ... in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $32.7 billion, or 0.3 percent.On inflation, the PCE price index decreased at a 0.4% annual rate in October, and core PCE prices increased at a 0.9% annual rate. This is very low and far below the Fed's 2% target.
Real PCE -- PCE adjusted to remove price changes -- increased 0.3 percent in October, compared with an increase of 0.1 percent in September. ... The price index for PCE decreased less than 0.1 percent in October, in contrast to an increase of 0.1 percent in September. The PCE price index, excluding food and energy, increased 0.1 percent in October, the same increase as in September.
The following graph shows real Personal Consumption Expenditures (PCE) through October 2013 (2009 dollars). Note that the y-axis doesn't start at zero to better show the change.
Click on graph for larger image.
The dashed red lines are the quarterly levels for real PCE.
This is just one month of Q4, but this suggests an increase in the PCE contribution to growth (compared to Q3). Also Q4 this year should be better than Q4 2012 (there was essentially no growth in Q4 2012).
I expect the change in private inventories to be a negative in Q4 2013 (inventories subtracted 2.0 percentage points in Q4 2012), but we won't see the large negative contribution from government this year (subtracted 1.3 percentage points in Q4 2012).