Inflation, income, spending and jobs data, the quick rundown all here

The PCE inflation stats for September were about as expected as it typically is since it comes after CPI and PPI. The headline gain was .2% m/o/m and the core rate was higher by .3% (and August was revised up by one tenth to a .2% gain). The y/o/y increases were 2.1% and 2.7% y/o/y vs 2.3% and 2.7% in the month before. Lower energy prices kept a lid on the top line, partly offset by another gain in food. Also, services inflation continued on, offsetting the deflation in goods prices.

Income growth was as forecasted, up by .3% while spending was up .5% m/o/m, one tenth above expectations. Spending growth was evenly split between goods and services. Combining the two saw the savings rate drop to 4.6% which is the lowest since December 2023. So, we saw an upward lift in the savings rate in the benchmark revisions but it’s falling right back down again.

Digging deeper into the income side was the Q3 Employment Cost Index which rose .8% q/o/q vs the estimate of .9%. It was up 3.9% y/o/y. Specifically private sector wages and salaries rose .8% q/o/q and 3.8% y/o/y which is further moderation but in part due to tougher comps. They rose 4.5% in Q3 2023 to highlight. In Q3 2019, private sector wages and salaries grew by 3% y/o/y, for perspective.