The personal consumption expenditures (PCE) in the United States continued to rise in October, and inflation indicators dropped significantly, especially after deducting energy and food. The rate hike at the Fed's December 13-14 meeting will be narrowed to 2 yards.

 

The U.S. Department of Commerce announced on the 1st that personal consumption expenditures in October increased by 0.8% compared with September, which was in line with forecasts and a larger increase than the 0.6% increase in September; real expenditures after deducting inflation increased by 0.5%, which was in line with forecasts and also That was up from a 0.3 percent gain in September. Real expenditure on goods increased by 1.1% month-on-month, driven by the increase in automobile sales; expenditure on services increased moderately by 0.2%, mainly supported by the hospitality and food service industries. Strong employment, rising wages, and sustained consumption strength provide a good start for the fourth quarter.

 

The overall PCE deflator increased by 0.3% from September, lower than the estimated 0.4%, the same increase as in September, indicating that inflationary pressures have eased slightly in the near future; it increased by 6.0% from the same period last year, in line with expectations, but lower than The 6.3% increase in September (revised data).

 

The most closely watched core PCE deflator rose modestly by 0.2% from September, the second smallest increase this year, far lower than the 0.5% in September and lower than the estimated 0.3%; up from the same period last year 5.0%, in line with forecasts, but down from September's 5.2% gain (revised).

 

October personal income increased by 0.7% month, higher than expected and September's 0.4% increase.

 

Economists pointed out that consumer spending in October was relatively strong, which is beneficial to economic growth; the increase in the PCE deflator was lower than expected, especially the increase in the core deflator was significantly smaller, which echoed the smaller increase in consumer prices in October and further supported The Fed will raise interest rates by 2 yards at its December meeting. Both data were positive, raising hopes for a "soft landing" for the U.S. economy.

 

But with inflation still outpacing wage gains, some households have begun drawing down savings accumulated during the pandemic, and credit card debt is rising rapidly, economists remain concerned about whether the spending power will continue into 2023 and keep the economy out of recession.

 

In addition, there is also good news from Britain across the Atlantic. A survey released by the Bank of England on the 1st showed that British companies said that the pace of price increases slowed down in November and expected that the inflation rate in the coming year will be lower than a month ago. level. (Source: cna1124) ☺