Inflation, spending, income and the savings rate falls to lowest of the year.

Headline PCE for September rose .4% m/o/m headline and by .1% core, both one tenth below estimates but because of rounding the y/o/y gains of 3.5% and 3.9% were as forecasted. Higher gasoline prices showed up in the jump in nondurable goods prices of 1.4% m/o/m but offset by a drop of .3% m/o/m in durable goods. Service prices grew by .2% m/o/m. Food prices were up by .2% m/o/m.

The spending and income figures were in line with expectations when we include the July revisions. Importantly, the savings rate slipped to 3.9% from 4.1% and that is the lowest since of the year, since December 2022 when it touched 3.4%.