The U.S. consumer is alive and well as evidenced by strong spending numbers in September. Personal Spending surged by 1.4% in September, above the 1% expected and up from 1% in August. Incomes rose by 0.9%, also surpassing estimates. Retailers are hoping for a strong holiday season and it will depend on the American consumer as consumer spending makes up two-thirds of U.S. economic activity.
Inflation remained tame in September as measured by the year over year Core PCE at 1.5% versus the 1.7% expected, up 0.2% monthly which was inline. This tame year over year number is well below the Fed's goal of 2.25% and higher. In other news, the October Chicago PMI 61.1% versus 59% expected. Economic data continues to stream in on the positive side. Next week is shaping up to be an event filled week with the presidential election, ADP, the Federal Open Market Committee meeting and the Jobs Report.
The U.S. stock markets have been on a seesaw ride this week impacted by no stimulus, solid economic data and a rise in virus cases. Stocks are lower as the week comes to an end as big tech reported good earnings but fell short on forecasts. The closely watched S&P 500 has lost over 6% from its recent closing high on October 12 as stimulus sputtered while COVID concerns grew. Next week will be key as to which direction stocks may take given the risk events.
Consumer spending solid. Inflation remains tame. Volatility rises in the stock markets.
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