Consumer Spending Surges and Inflation Slows
November 30, 2018
Consumer spending in October saw the largest increase in 7 months. The month also saw a modest increase in inflation, bringing the year-over-year increase to the lowest level since February.
The numbers come from the latest Commerce Department report on personal income and spending. Spending increased 0.6 percent in October, driven primarily by prescription medicines and utilities. Economists had forecast an increase of 0.4 percent.
Despite the increased spending, increases in prices actually slowed down. The personal consumption expenditure index (PCE), the Federal Reserve’s preferred method of tracking inflation, increased 0.1 percent for the month, down from 0.2 the month before. This lowered the year-over-year increase to 1.8 percent.