U.S. personal income rises below expectations in September, personal spending rises 0.4 pct

U.S. personal income rose below expectations in the month of September. On a sequential basis, personal income rose 0.2 percent, as compared with consensus forecast of a rise of 0.4 percent. Personal spending rose 0.4 percent, in line with expectations.

Prices rose 0.1 percent sequentially and were up 2 percent year-on-year. Core prices, excluding food and energy, were up 0.2 percent and rose 2 percent year-on-year.

Removing price growth, real spending rose 0.3 percent in September and revised up to 0.4 percent in August. Component wise, real spending was driven by durables, while non-durable and services spending rose 0.2 percent. The personal saving rate dropped to 6.2 percent from August’s 6.4 percent, falling from a recent peak of 7.4 percent in February.

Spending momentum continued to be solid through the end of the third quarter, leaving a strong handoff to the fourth quarter, noted TD Economics. Tax cuts early in the year are contributing about half a percentage point to disposable income growth, and this is evident in spending.

“In the absence of further tax cuts, this lift will diminish in 2019, setting the stage for a more staid performance over the next year”, added TD Economics.

At 13:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 58.0362. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex