Personal Income Slipped in October

The Bureau of Economic Analysis just released a report showing that, in October, Personal Income fell by 0.7% and that was far more than the 0.1% dip that analysts expected. Personal Spending still managed a 0.5% rise and that slightly beat estimates. Inflation-adjusted Real Personal Spending rose by 0.5% and that was also higher than the 0.3% expectation.

The BEA also announced that the inflation for which adjustments are made didn’t change much in October. The headline Personal Consumption Expenditures Index didn’t change last month but the year-over-year pace still could not prevent a slide to 1.2% from 1.4%. Core PCE, without food and energy, was also flat for the month with the twelve-month pace slowing to 1.4% from 1.6%.

New Home Sales continued their brisk pace in October with an annualized pace of 999k and that beat estimates of 975k. September’s already heady pace of 959k was revised to 1M. Along with that, the University of Michigan’s Consumer Sentiment Index was little changed this month with a move to 76.9 from 77. The Expectations component slipped to 70.5 from 71.3 versus a forecasted move to 71.9. Earlier in the week, the Conference Board’s Confidence Index showed an even greater decline. Markets are little changed by any of this news and Treasuries are still slightly stronger with the Ten-Year’s yield down to around 85 basis points.