PCE Report: Fed's Preferred Inflation Gauge Hit 2.8% In September

• Consumer spending, adjusted for inflation, was unchanged in September, following a 0.2% increase in August.
• Personal income rose 0.4% in September, similar to the increase in August.
• Personal savings stood at $1.09 trillion in September, while the personal saving rate was 4.7%, inching up from 4.6% in August.

The Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve’s preferred gauge of inflation, rose to 2.8% in September on an annual basis.

According to data from the Commerce Department, core PCE, which excludes food and energy, was at 2.8% on an annual basis. It rose 0.2% over the previous month.

While PCE came in lower than expectations, core PCE was in line with analyst forecasts, according to a Dow Jones estimate compiled by MarketWatch.

State Of Personal Incomes, Outlays

Consumer spending, adjusted for inflation, was unchanged in September, following a 0.2% increase in August. Personal income rose 0.4% in September, similar to the increase in August.

In absolute terms, personal income increased $94.5 billion in September, while disposable personal income rose $75.9 billion. Personal consumption expenditures increased $65.1 billion, while personal outlays increased $70.7 billion during the month.

Personal savings stood at $1.09 trillion in September, while the personal saving rate was 4.7%, inching up from 4.6% in August.

Consumer Sentiment Improves

The monthly Index of Consumer Sentiment released by the University of Michigan on Friday showed an uptick in December, beating Wall Street expectations.

Consumer sentiment rose to 53.3 in December from 51 in November. “Overall, while views of current conditions were little changed, expectations improved, led by a 13% rise in expected personal finances, with improvements visible across age, income, education, and political affiliation,” the report stated.

Meanwhile, U.S. equities gained in Friday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up by 0.5%, the Invesco QQQ Trust ETF (QQQ) gained 0.78%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.4%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was down 0.08% at the time of writing.

Also See: Ahead Of PCE Data Release, Here's What CME FedWatch Is Indicating About December Fed Rate Cut Chances

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