MNI DATA ANALYSIS: US Sept Core PCE Prices Still +2.0% Y/Y>

--Core PCE Prices +0.2% M/M; Overall Prices +0.1% M/M, +2.0% Y/Y

--Nominal PCE +0.4%, Real PCE +0.3%; Personal Income +0.2% 

By Kevin Kastner, Harrison Clarke, and Shikha Dave

     WASHINGTON (MNI) - Nominal PCE rose 0.4% in September as expected, 

while core PCE prices were up 0.2% on the month, keeping the year/year 

rate at 2.0% after rounding, according to data released by the Bureau of 

Economic Analysis Monday morning. 

     The 2.0% year/year rate for core PCE prices is in line with the 

Fed's inflation target after 2.0% readings in the previous four months. 

--PCE GROWTH RISES AS EXPECTED

     The 0.4% gain in current dollar PCE, in line with expectations, 

followed a 0.5% gain in August. Spending on durable goods was up 1.4% in 

the month, while nondurable goods spending rose 0.3% despite a 0.4% 

decrease in energy prices. Services spending was up 0.3% .   

     Real PCE was up 0.3% in September, as the overall PCE price index 

was up 0.1%. The overall PCE price index was up 2.0% year/year, down 

from 2.2% in August. 

     After inflation adjustment, durable goods PCE was up 1.8%, while 

real nondurable goods PCE was up 0.2% and real services PCE was flat. 

--INCOME RISES, SAVINGS RATE DOWN

     Personal income rose by only 0.2%, less than expected, on a soft 

increase in wages and salaries and a sharp drop in proprietor's income. 

These were partially offset by stronger gains from the other income 

categories. 

     The saving rate fell in September to 6.2% from 6.4% in August. 

     Personal taxes rose by 0.3% in the month after a 0.6% increase in 

August. As a result, disposable personal income rose by 0.2% after a 

0.4% increase in August, while real disposable income was up 0.1%. 

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

[TOPICS: MAUDS$,MT$$$$,M$U$$$]