**MNI 5 THINGS: US Oct Core PCE Price Index +0.1%; Y/Y +1.8%>

--5 Things We Learned From October Personal Income Data         

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - The following are the key points from the 

October personal income, spending, and price data released Thursday by 

the Bureau of Economic Analysis: 

     - The data suggest inflation is still well contained, with the 

year/year growth rate for the core measure falling to 1.8% (low since 

March) after downward revised 1.9% readings in the previous two months 

that were mostly due to rounding. The overall PCE price index was +2.0% 

y/y, same as in September and below levels seen in the summer. Personal 

income and spending were both stronger than expected, but the softer 

inflation picture is likely be more closely viewed by markets. 

     - The core PCE price index rose 0.1% m/m (+0.102% unrounded), as 

expected, following a +0.2% (+0.158%) reading in September. The y/y rate 

slipped to +1.8% (+1.777% unrounded vs +1.937% in September), as the 

month/month gain was 0.3% a year ago. The overall PCE price index was up 

0.2% and the y/y rate held steady at +2.0%, below the levels seen in the 

summer. 

     - Current dollar PCE was up 0.6%, above expectations for a 0.5% 

gain that were rooted in a very strong retail sales report. A 0.5% gain 

in durable goods spending, likely on vehicles, followed a 0.1% decline 

in September. Nondurable goods spending was up 0.6% on a spike in energy 

prices and services spending was up 0.7%. 

     - Real PCE was up 0.4% after a 0.1% gain in September. Through one 

month, real PCE is running +2.4% SAAR from the Q3 average, a slowdown 

from the 3.6% rate reported Q3 GDP report on Wednesday. 

     - Personal income was up 0.5%, above the 0.4% gain expected, 

with wages and salaries up 0.3% and strong income gains for 

proprietors' income, return on assets, and current transfer receipts.

Personal taxes were up 0.2% after a 0.4% gain in September. 

Disposable personal income was up 0.5% while real disposable income 

was up 0.3%. The savings rate fell to 6.2% from 6.3% in September. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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