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Nominal personal income decreased at a nonannualized rate of 0.1 percent in October, following increases of 0.5 percent in both August and September. Since October of last year, nominal personal income has increased 3.4 percent. Disposable personal income (DPI)— nominal personal income less current personal taxes—decreased 0.2 percent in October, and over the past three months, has averaged increases of 0.3 percent. After controlling for price changes, real DPI decreased at a nonannualized rate of 0.2 percent. This follows increases of 0.5 percent in August and 0.4 percent in September. Over the past year, real disposable personal income has increased 1.8 percent.
Real personal consumption expenditures (PCE) increased 0.3 percent in October, following increases of 0.2 percent in August and 0.1 percent in September. The three-month trend in consumption growth is at 0.2 percent and has remained mostly between 0.1 and 0.2 percent over the past year. On a year-over-year basis, consumption has increased 2.1 percent. In October, consumption of durable goods increased 0.8 percent and consumption of nondurable goods increased 0.7 percent, driving the gain in overall consumption. Consumption of services increased just 0.1 percent. A look at the year-over-year changes shows that growth in goods consumption has outpaced growth in services consumption over the past twelve months, as goods consumption has increased 4.1 percent and services consumption has increased 2.7 percent. The larger increase in consumption relative to income during October resulted in a 0.4 percentage points decline in the personal savings rate, from 5.2 to 4.8 percent.