The numbers: U.S. consumer spending rose 0.6 in September, the Commerce Department said Friday. The gain was in-line with forecasts of economists surveyed by The Wall Street Journal.
Personal income slumped 1% in September after a 0.2% gain in the prior month. Economists were looking for a 0.4% decline.
As a result, the personal savings rate fell to 7.5% from 9.2% in the prior month.
The 12-month increase in the PCE index, the Federal Reserve’s preferred inflation gauge, rose to 4.4% in September from 4.2% in the prior month. That’s well above the Fed’s 2% annual target rate.
The core PCE rate that strips out food and energy held steady at 3.6% on an annual basis.
Big picture: Economists are counting on continued consumer spending to power the economy. Consumers bolstered their savings during the pandemic but this financial cushion is being eroded in part by higher inflation.
Market reaction: Stocks
were set to open lower on Friday after disappointing results from Amazon and Apple.