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The analysis team at Nomura expect a steady 0.4% m-o-m increase in US personal income in September.

Key Quotes

“With steady readings of the household saving rate, continued gains in income should remain supportive for spending.”

“In addition, tax cuts will likely continue to boost personal spending growth. Against this backdrop, we expect a steady 0.2% increase in personal spending, consistent with healthy momentum in personal consumption growth in Q3.”

“Based on September retail sales data, consumer spending on autos likely rose solidly while spending on gasoline declined. In addition, a sharp decline in receipts at drinking and dining venues suggests a possible slowdown in service spending.”

“The impact of Hurricane Florence on personal spending in September does not appear to be large as disruptions to sales activity were likely offset by a pickup in replacement demand for household goods. Similarly, personal spending in October will likely be affected by offsetting impact of Hurricane Michael.”