Released this morning, Personal Income grew 0.5% in October, slightly higher than estimates. Personal Spending grew 0.6% for the month, also above estimates. One measure of inflation, the Personal Consumption Expenditures (PCE) deflator, increased 2.0% on annual basis. The core rate, excluding food and energy, increased 1.8% annually. The data suggests consumers are continuing to increase their spending as their incomes rise, while inflation remains near Federal Reserve targets; a decent combination for sustaining economic growth. Coupled with Jerome Powell’s comments yesterday indicating the current rate is just below the estimated neutral range, the Federal Reserve has room to be measured and data dependent with their policy decisions in the months ahead. In all, equity futures and bond yields are lower this morning heading into the market open.
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