US DATA
- Personal incomes saw a surprisingly strong 0.6% M/M increase in Oct (cons 0.3) after an unrevised 0.3% M/M in Sept, which carried over into strong disposable income growth of 0.7% M/M after 0.3%.
- With nominal spending as expected at 0.4% M/M (cons 0.4) after an upward revised 0.65% (initial 0.53), it saw the savings ratio lift three tenths to 4.4% from downward revised 4.1% (initial 4.6).
- The savings ratio sees regular and sometimes large revisions [especially in the annual revisions two months again which saw BEA finding an extra $559bn in 2023 for national incomes] but the latest iteration shows a first monthly increase in the savings ratio since January. The decline from the recent high of 5.5% in Jan has acted as a tailwind to consumption since then.
- As for latest spending momentum, real personal spending disappointed slightly in Oct with 0.1% M/M (cons 0.2) after mixed revisions, with an upward revised 0.47% M/M (initial 0.36) in Sept after a downward revised 0.08% M/M (initial 0.16) in Aug. That Aug revision was behind the earlier surprise downward revision from 3.7% to 3.5% annualized for Q3.
- Trend consumption is still strong, rising 3.0% annualized on a 3m/3m basis to October.
- Goods consumption paused in October after a booming Sept (0.0% M/M after 1.1% M/M), as indicated by surprisingly soft retail sales data earlier in the month. Services consumption meanwhile saw a second consecutive month at a somewhat mellow 0.17% M/M.
- Goods consumption continues to drive recent trend growth, rising 4.0% annualized vs 2.6% for services on 3m/3m rates, something that be borne in mind when it comes to initial reactions to upcoming retail sales data.
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