U.S. headline PCE index likely rose in November, personal spending to have grown strongly

U.S. personal income & spending data for the month of November is set to release tomorrow. According to a TD Economics research report, the key core PCE price index is expected to have risen only 0.1 percent in November, lowering the 12-month change to 1.5 percent from 1.6 percent in October. Base effects are likely to have helped boost the 12-month change again in the first quarter, but for now the pace is moving away from the Fed’s 2 percent goal.

“We expect the headline PCE price index to be up 0.2 percent m/m, lifting the 12-month change to a still-low 1.4 percent from 1.3 percent”, said TD Economics.

Meanwhile, personal spending is expected to have risen 0.4 percent in the month, marking its strongest monthly rise in four months. In spite of that, the November print is expected to continue to indicate household spending is moderating in the fourth quarter.

“Lastly, we forecast income growth to rebound at 0.3 percent m/m, following a flat print in October”, added TD Economics.