U.S. Per­sonal In­comes Up, Per­sonal Sav­ings De­cline

The Bond Buyer - - Market News -

Amer­i­cans kept on spend­ing in Septem­ber as in­come gains cooled, push­ing down the sav­ings rate to the low­est this year. In­fla­tion matched the Fed­eral Re­serve’s tar­get, re­in­forc­ing the cen­tral bank’s out­look for grad­ual in­ter­est-rate hikes.

Pur­chases, which ac­count for about 70% of the econ­omy, rose 0.4% from the prior month, match­ing econ­o­mists’ es­ti­mates, fol­low­ing an up­wardly re­vised 0.5% in­crease, Com­merce Depart­ment fig­ures showed Mon­day.

In­comes ad­vanced a less-than-pro­jected 0.2%, the weak­est in more than a year, while Amer­i­cans saved 6.2% of their dis­pos­able in­come, match­ing the low­est level since 2013.

The Fed’s pre­ferred in­fla­tion gauge -- tied to con­sump­tion -- rose 0.1% from the pre­vi­ous month, match­ing pro­jec­tions, and was up 2% from a year ear­lier. Ex­clud­ing food and en­ergy, so-called core prices 0.2%, slightly above the me­dian es­ti­mate for a 0.1% rise, and were also up 2% on an an­nual ba­sis.

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