30 November 2007, 17:57  US October real consumer spending flat

The economic headwinds of rising energy prices, falling home prices and growing economic pessimism continued to push down US consumers' spending as the fourth quarter began, abetted by a decline in their inflation-adjusted disposable incomes. October personal consumption rose 0.2 pct, the Commerce Department reported today, but after adjusting for inflation, consumers spent no more than they did in September. The unchanged real consumption number was the smallest change since a 0.2 pct decline in March of this year. Personal income also rose 0.2 pct in October but real disposable income -- after adjusting for inflation and taxes -- fell 0.1 pct, the first decline since April. Nominal disposable income rose 0.1 pct. Economists had forecast larger growth numbers for both income and spending, with personal income expected to rise 0.4 pct and consumption to rise 0.3 pct. Inflation held steady in October. The monthly increase in the PCE price index was the same 0.3 pct as September and the core PCE increase, at 0.2 pct, was also unchanged. Year-over-year, the October core PCE index -- excluding food and energy -- was up 1.9 pct, a tenth of a point higher than economists predicted, but also unchanged from the previous month. Headline PCE inflation was 2.9 pct over the year, up from a 2.4 pct September annual increase, as rising food and fuel prices kicked in. The increased consumer caution was not reflected in a higher personal saving rate. It fell to 0.5 pct in October from 0.7 pct in September.

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