Personal spending rises less than expected in October

The Federal Reserve is still undershooting its inflation target.

The latest report on personal income and outlays showed that income rose as expected in October while spending rose less than expected.

Income rose 0.4% in October while spending ticked up 0.1%. Real spending rose 0.1% in October, which was also less than expected.

Expectations were for income to rise 0.4% in October while spending ticked up 0.3%. Real spending, or spending adjusted for inflation, was expected to rise 0.2% in October.

Personal consumption expenditures, or an alternative reading on inflation, showed prices rose 1.3% on a “core” basis, which excludes the more volatile cost of food and energy.

“Core” PCE is the Fed’s preferred measure of inflation. Economists had expected “core” PCE to rise 1.4%.

The personal savings rate also rose in October to 5.6% from 5.3%.

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