US: Personal spending likely cooled to a 0.2% pace in October – BMO CM

After sprinting 1.0% in September amid the replacement of flood-damaged items, US personal spending likely cooled to a 0.2% pace in October, suggests Sal Guatieri, Senior Economist at BMO Capital Markets.

Key Quotes

“Although volumes likely rose slightly, the earlier strong hand-off suggests real consumer spending hopped back onto the 3%-growth saddle in Q4. Meantime, sturdy job growth should keep personal income tracking higher. The decade-low savings rate is somewhat concerning, as it partly reflects the wealth effect from a booming equity market. Core PCE prices are expected to increase 0.2% for the first time in six months, nudging the yearly rate up to a still-low 1.4%.