Analysts at TD Securities note that the US personal spending rose a firm 0.4% MoM for November, largely in line with expectations, while personal income came in at a stronger 0.5% clip (consensus: 0.3%).
Key Quotes
“Disposable personal income continues to run at a solid 3% annual clip, suggesting there’s upside room for household spending which has slowed to 2.5% y/y so far in Q4.”
“On the other hand, core PCE inflation matched expectations at 0.1% m/m for November, softening its annual pace to 1.6% y/y, a touch down from an upward-revised 1.7% print in October.”
“Separately, UMich’s consumer sentiment rose to 99.3 in December, up modestly from its preliminary level at 99.2 but notably higher vs 96.8 in November. Importantly, inflation expectations for the 5-10y horizon fell to an all-time low at 2.2%. Low inflation expectations should remain a key concern for Fed as the committee formulates monetary policy for 2020.”
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