US personal incomes and spending print ahead of forecasts in September

Americans splashed out at a stronger than expected pace last month.

According to the Department of Commerce, in September personal consumption expenditures grew at a month-on-month pace of 1.4% (consensus: 1.0).

Growth in personal incomes also outpaced expectations, growing by 0.9% versus August and that was on top of upwards revisions to figures for the preceding two months.

The rate of increase in personal incomes for July was revised up from 0.5% to 0.9%, while the August print was marked up from the preliminary estimate of -2.7% to -2.5%.

The result was that Americans did not need to tap their savings by quite as much in order to sustain spending, with the personal savings rate falling from 14.8% in Agust to 14.3%.

Prices pressures were also more muted than anticipated, boosting Americans' purchasing power.

The year-on-year rate of gain in the PCE price deflator edged up by a tenth of a percentage point to 1.4% (consensus: 1.5%) and by the same amount at the core level to 1.5% (consensus: 1.7%).