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US: Strong income growth, savings rate up – Wells Fargo

FXStreet (Córdoba) - According to economist from Wells Fargo, today’s numbers showed a strong income growth and suggest that consumers have some spending firepower ahead of holidays.

Key Quotes:

“Strong income growth and a slower pace of spending in October pushed the saving rate up to its highest mark in nearly three years. The Fed’s favored gauge of inflation eased, but looks at odds with other measures.

“Personal income growth strengthened in October, rising 0.4 percent. Income from wages & salaries led the increase, up 0.6 percent, as hiring and average hourly earnings picked up. Total income has risen 4.6 percent over the past year, but labor income is up 4.9 percent over the same period.”

“The tepid space of spending pushed the saving rate up to its highest level since before the “fiscal cliff” of 2013 and suggests consumers have some spending firepower ahead of the holidays.”

“PCE inflation came in softer than expected at 0.1 percent, while the core index rose a measly 0.04 percent. The trend in core PCE continues to look out of step with other measures, complicating the Fed’s interpretation of underlying price pressures.”

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