Personal consumption expenditures (PCE) rose by $86.9 billion, or 0.6 percent, in October, following a revised $31.5 billion advance, or 0.2 percent, in September. The pick up in consumption growth was due to an increase in consumption of durable goods (0.5 percent vs -0.1 percent in September), nondurables (0.6 percent vs 0.2 percent) and services (0.7 percent vs 0.3 percent).
Real PCE went up $56.5 billion, or 0.2 percent, reflecting an increase of $14.3 billion in spending for goods and a $41.4 billion increase in spending for services. Within goods, spending for prescription drugs was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas.
Personal income grew $84.9 billion, or 0.5 percent, in October after a $40.2 billion, or 0.2 percent, gain in September. This figure also beat market forecasts of 0.4 percent, mainly driven by gains in wages and salaries, proprietors’ income, and government social benefits to persons. Farm proprietors’ income increased $11.6 billion in October, which included subsidy payments associated with the Department of Agriculture’s Market Facilitation Program.
Personal outlays rose $90.8 billion in October. Personal saving was $967.8 billion in October and the personal saving rate, personal saving as a percentage of disposable personal income, was 6.2 percent.
Disposable personal income (DPI) increased $81.7 billion, or 0.5 percent, in October. Real DPI advanced 0.3 percent.
The PCE price index increased 0.2 percent month-over-month in October, following a 0.1 percent rise in each of the previous four months and matching market expectations. Cost of goods rose by 0.2 percent, compared with a 0.1 percent drop in September, as durable goods prices edged up 0.1 percent (vs -0.4 percent in September) and nondurables increased 0.3 percent (vs 0.1 percent in September). Meanwhile, services inflation was unchanged at 0.2 percent. Excluding food and energy, PCE prices were up 0.1 percent, after a 0.2 percent gain in September and slightly below market expectations of 0.2 percent. Year-on-year, the PCE price index advanced 2 percent, the same as in the prior month, and the core index rose 1.8 percent, below a 1.9 percent gain in September.