Consumer Spending & Inflation Slowed in October
Washington, DC, December 1, 2023-"Americans slowed their spending in October and inflation continued cooling as the economy downshifted into fall after a fast-paced summer,” according to the Wall Street Journal.
“Consumer spending rose 0.2% in October, down sharply from a 0.7% rise in September, the Commerce Department said Thursday. The October reading marked the slowest increase since May. The combination of ebbing income growth, high interest rates and prices, dwindling pandemic savings and the resumption of student-loan payments is eroding Americans’ ability to keep boosting their spending as briskly as they did through the summer, economists say.
“Inflation has cooled markedly this year, likely bringing the Federal Reserve’s interest-rate increases to an end. Price growth as measured by the personal-consumption expenditures price index, the Fed’s preferred inflation gauge, remained mild in October.
“Core prices, which exclude volatile food and energy items, were up 3.5% from a year ago. They rose 2.5% at a six-month annualized rate, down from 4.5% in the six months through April, a dramatic improvement.
“Fed officials are likely to hold interest rates steady at a 22-year high at their meeting Dec. 12-13. The big question for investors is shifting from whether the Fed will raise rates again to whether and when officials will confirm that they are done hiking rates. Officials say they need to see inflation continuing to decline toward their 2% target before they can do that.”