U.S. Personal Income And Spending Growth Matches Estimates In September

Personal income and spending in the U.S. both rose in line with economist estimates in the month of September, according to a report released by the Commerce Department on Thursday.

The report said personal income increased by 0.3 percent in September after climbing by an upwardly revised 0.5 percent in August.

Economists had expected personal income to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, also rose by 0.3 percent in September after advancing by 0.6 percent in August.

“Wages and salaries were unchanged in September although, admittedly, that included a small downward adjustment to allow for the impact of the GM strike,” said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, “Instead, the gains in overall income in August and September were principally due to farm subsidies paid out by the Trump administration to counter the effects of the trade war.”

Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in September, matching the revised uptick seen in August.

Personal spending had been expected to inch up by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

Real spending, which is adjusted to remove price changes, also rose by 0.2 percent for the second consecutive month.

With income rising by slightly more than spending, personal saving as a percentage of disposable personal income climbed to 8.3 percent in September from 8.1 percent in August.

A reading on inflation said to be preferred by the Federal Reserve showed the annual rate of core consumer price growth was unchanged from the previous month at 1.7 percent.

“While the Fed will be happy to see monthly consumption growth holding up for now, officials will be less encouraged by the incoming PCE inflation figures,” Ashworth said.

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