Personal Income Down 0.1%, Consumption Up 0.2%; Savings Rate Down to 5.3%

Personal consumption rose 0.2% in September, following two months of 0.5% rises. Spending growth was primarily due to increased expenditures on durable goods. This component increased 0.7% over the month. Consumption was 3.7% higher than a year prior.

The faster growth rate of consumption relative to income over the month caused the savings rate to decline by 0.3% to 5.3%. The savings rate has been declining modestly in recent months; however, it still remains elevated relative to most years of the past decade. Households are continuing to desire savings to help rebuild lost wealth and to create a cushion to deal with uncertainty.

As measured by the PCE deflator, prices increased 0.1% over the month. From a year prior, the PCE deflator was 1.4% higher. The core PCE deflator, which excludes energy and food prices, was unchanged over the month and was 1.2% higher from the year prior.

m/m % change	Sep	Aug	Jul	Jun	May	Apr
Personal Consumption	0.2	0.5	0.5	0.0	0.2	0.0
Real	0.1	0.3	0.3	0.1	0.3	0.0
Personal Income	-0.1	0.4	0.2	0.0	0.4	0.4
Real	-0.2	0.2	0	0.1	0.5	0.4
PCE Deflator	0.1	0.2	0.2	-0.1	-0.1	0.0
Core PCE Deflator	0.0	0.1	0.1	0.1	0.1	0.0
Savings Rate (level)	5.3	5.6	5.7	6.0	6.0	5.8

10.11.01 (Source: Bureau of Economic Analysis)