Highlights of the October personal consumption expenditure report

  • Prior was +1.3% y/y
  • Core m/m vs +0.2% m/m expected
  • Prior m/m core was +0.1%
  • PCE deflator +1.6% y/y % vs +1.5% expected
  • Prior deflator +1.6% y/y (revised to 1.7%)
  • Deflator m/m +0.1% vs +0.1% expected

No real surprises in the inflation data. The deflator was a bit higher than expected.

Spending/income:

  • Personal spending +0.3% vs +0.3% expected
  • Prior personal spending +0.9%
  • Personal income +0.4% vs +0.3% expected
  • Prior personal income +0.4%
  • Real personal spending +0.1% vs +0.2% expected
  • Prior real personal spending +0.6% (revised to +0.5%)

The income number was a bit better but spending was on the soft side.

Overall, there isn't any real good or bad news in this report. It shows a bit more inflation and a bit less spending. I don't see it changing the Fed's view.