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Analysts at Nomura expect a stable 0.4% m-o-m increase in US personal income in August.

Key Quotes

“For personal spending, we also forecast a steady 0.4% increase, consistent with healthy momentum in household spending growth. Retail sales report for August suggests consumer spending on durable goods such as motor vehicles and furniture declined in the month, but spending on gasoline and certain nondurable goods likely rose firmly and offset weaker spending on durable goods. Moreover, spending on services likely increased at a steady pace.”

“Looking ahead, we expect the recent tax cuts and the healthy labor market to remain supportive for personal consumption growth in the near term.”

PCE deflators: Reflecting CPI and PPI data for August, our forecast for core PCE inflation for the month stands at +0.0% (+0.038%) m-o-m, which would drive down its y-o-y change to 1.9% (1.919%) from 2.0% (1.984%), previously.”

Overall, we expect core PCE price index to increase only modestly by +0.038% m-o-m (rounded to no change) in August, which would drive down its y-o-y change to 1.9% (1.919%) from 2.0% (1.984%), previously.”