US personal income rose 0.4% mom in September, in line with expectations, while personal spending increased 0.3%, a touch below the 0.4% consensus. The combination suggests consumer demand remains resilient but is moderating gradually.
Inflation readings were broadly stable. Headline PCE rose 0.3% mom, keeping the annual rate at 2.8% yoy, slightly above August’s 2.7% but exactly matching forecasts.
Core PCE increased 0.2% mom, while the annual measure eased from 2.9% yoy to 2.8%, undershooting expectations for no change. The drop in core PCE is a mild but welcome sign for policymakers looking for continued disinflation.
Overall, the data reinforce expectations for a Fed rate cut next week, as consumption growth cools and inflation edges lower.
