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Households saw a more modest rise in income for September, but that didn’t hold back Q3 consumption, explained analysts at FXStreet.

Key Quotes:  

“Consistent with the breakneck pace of consumption in the third quarter, personal spending rose 0.4% in September. But, with a more modest reading for personal income (up 0.2%), consumers dipped into their savings last month to fuel consumption. The saving rate slid to a still-healthy rate of 6.2%. Spending was driven by a surge in durables, which, at least in part, was due to replacement demand after Hurricane Florence.”

“While the consumer is entering the fourth quarter with considerable momentum, rising inflation and interest rates will likely be a headwind to growth.”