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U.S. Personal Spending Matches Consensus in October, Core PCE in Line

Economic IndicatorsNov 30, 2017 08:32AM ET
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© Reuters. U.S. personal spending rises 0.3% in October, in line with forecasts

Investing.com – U.S. consumer spending increased as expected in October, while core inflation also matched consensus, official data showed on Thursday.

In a report, the Commerce Department said that personal spending increased by 0.3% in October from the prior month, in line with forecasts and compared to the prior month’s 0.9% gain which was a slight downward revision from the initial reading of 1.0%.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

Personal income, meanwhile, registered an increase of 0.4% in October, better than the forecast for a 0.3% gain and compared to the prior rise of 0.2%.

Meanwhile, the core PCE price index rose 0.2% in October from a month earlier, in line with expectations. September’s reading was revised from a 0.1% gain to a 0.2% increase..

The core PCE price index rose at an annualized rate of 1.4% in October, matching consensus and the prior month’s reading which was revised upwards from 1.3%.

The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

The report also showed that real personal consumption gained just 0.1% last month, missing expectations for a 0.2% increase and following a rise of 0.5% in October that was decreased from an initial 0.6% gain.

Following the report, which was released simultaneously with weekly jobless claims, EUR/USD was trading at 1.1841 from around 1.1847 ahead of the release of the data, GBP/USD was at 1.3455 compared to 1.3469 previously, while USD/JPY was at 112.41 from 112.34 earlier.

The US dollar index, which tracks the greenback against a basket of six major rivals, was unchanged at 93.25.

Meanwhile, U.S. stock futures pointed to a higher open. The blue-chip Dow futures rose 92 points, or 0.38%, the S&P 500 futures gained 8 points, or 0.30%, while the tech-heavy Nasdaq 100 futures advanced 22 points, or 0.34%.

Elsewhere, in the commodities market, gold futures traded at $1,276.95 a troy ounce, compared to $1,277.87 ahead of the data, while crude oil traded at $57.81 a barrel from $57.78 earlier.

U.S. Personal Spending Matches Consensus in October, Core PCE in Line
 

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