Personal consumption expenditure (PCE) increased $34.4 billion, or 0.3 percent. It follows a 0.9 percent jump in the previous month due to a slowdown in spending for goods (0.1 percent from 1.8 percent in September), of which durable (-0.1 percent from 2.9 percent) and nondurable goods (0.2 percent from 1.3 percent); and services (0.3 percent from 0.4 percent).
Meanwhile real PCE went up $13.1 billion due to a rise of $11.4 billion in spending for goods and a $2.7 billion increase in spending for services. Within goods, other nondurable goods, which includes prescription drugs and recreational items, was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for other services, which includes passenger fares for foreign travel and communication services.
Personal income went up 0.4 percent or USD 65.1 billion month-over-month in October of 2017, the same as in September and better than market expectations of a 0.3 percent gain. It primarily reflected increases in wages and salaries and personal interest income. Personal outlays increased $38.7 billion in October. Personal saving was $457.3 billion in October and the personal saving rate rose to 3.2 percent after falling to 3 percent in September, which was the lowest since December 2007.
The core personal consumption expenditures price index, the Fed's preferred inflation gauge which excludes volatile food and energy prices, rose 0.2 percent month-on-month, in line with estimates and the same as in the previous month. Year-on-year, it was up 1.4 percent, following a 1.3 percent, the same as in September. The central bank has a 2 percent target.
In the third quarter of the year, consumer spending grew at a 2.3 percent annualized rate, slowing from the previous period's 3.3 percent pace.