Highlights of the October 2020 PCE report:
- Prior was +1.4%
- Core PCE deflator MoM 0.0% vs. 0.0% estimate
- Core PCE deflator YoY +1.4% vs. +1.4% estimate
- PCE deflator MoM 0.0% vs. 0.0% estimate
- PCE deflator YoY +1.2% vs. +1.2% estimate
- Personal income -0.7% vs. +0.4% estimate
- Prior income +0.9% (revised to +0.7%)
- Personal spending +0.5% vs. +0.3% estimate
- Prior spending +1.4% (revised to +1.2%)
Spending is a tad strong on the headline but in reality, it's a tad soft because of the revision. The surprise in this report is the drop in income, which doesn't bode well for the months ahead. That said, the savings rate is still historically high so there will be plenty of money to be splashed around after the pandemic.
