U.S. Consumer Spending Beat Expectations in September; Inflation Still Rising

Reuters2022-10-28

WASHINGTON, Oct 28 (Reuters) - U.S. consumer spending increased more than expected in September, while underlying inflation pressures continued to bubble, keeping the Federal Reserve on track to hike interest rates by 75 basis points for the fourth time this year.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month, the Commerce Department said on Friday. Data for August was revised higher to show spending increasing 0.6% instead of 0.4% as previously reported. Economists polled by Reuters had forecast consumer spending gaining 0.4%.

The data was included in Thursday's advance third-quarter gross domestic product report, which showed economic growth rebounding after contracting in the first half of the year.

Last quarter's 2.6% annualized growth pace was largely driven by a sharp narrowing in the trade deficit.

Growth in consumer spending slowed to a 1.4% rate from the April-June quarter's 2.0% pace. Domestic demand last quarter was the softest in two years.

The Fed has raised its benchmark overnight interest rate from near zero in March to the current range of 3.00% to 3.25%, the swiftest pace of policy tightening in a generation or more.

Cooling demand has left some economists anticipating that the U.S. central bank could signal slower rate hikes at its policy meeting next Tuesday and Wednesday, though much would depend on inflation, which remains stubbornly high.

The personal consumption expenditures (PCE) price index rose 0.3% last month after a similar gain in August. In the 12 months through September, the PCE price index increased 6.2%, matching August's rise.

Excluding the volatile food and energy components, the PCE price index climbed 0.5% after increasing by the same margin in August. The so-called core PCE price index advanced 5.1% on a year-on-year basis in September after increasing 4.9% in August.

The Fed tracks the PCE price indexes for its 2% inflation target. Other inflation measures are running much higher. The consumer price index increased 8.2% year-on-year in September.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • robot1234
    2022-10-29
    robot1234
    Key inflation gauge for the Fed rose 0.5% in September, in line with expectations. The core personal consumption expenditures price index in September increased 0.5% from the previous month and 5.1% from a year ago. Including food and energy, PCE inflation rose 0.3% for the month and 6.2% on a yearly basis. Personal spending rose 0.6%, more than expected amid the rise in prices. Compensation costs increased 1.2% in the third quarter, in line with estimates. The report comes as the Fed is prepared to enact its sixth interest rate increase of the year at its policy meeting next week. In an effort to combat inflation running at its fastest pace in nearly 40 years, the Fed has been raising rates, with increases totaling 3 percentage points thus far. Markets widely expect the Fed to enact its f
    • robot1234: 
      Europe markets close higher despite inflation and GDP painting bleak picture; up 6% for October
    • robot1234: 
      Big Tech falters on dreary earnings and forecasts for Q4— Meta has worst week ever, Amazon tumbles 13%
    • robot1234: 
      Key inflation gauge for the Fed rose 0.5% in September, in line with expectations
    • powerbert: 
      The present inflation will take a long time to come down.
    • weijie123: 
      Yes
  • BlitzBison
    2022-10-29
    BlitzBison
    Ok
  • S071
    2022-10-28
    S071
    Ok
  • newbe1001
    2022-10-28
    newbe1001
    Ok
  • 来人
    2022-10-28
    来人
    ok
  • JustLe
    2022-10-28
    JustLe
    Ok
Leave a comment
13