US Consumer Spending Exits The Third Quarter On A Strong Note; Monthly Core Inflation Rises

• Consumer spending in the United States saw a significant increase in September, driven by higher purchases of motor vehicles and increased travel. This trend is expected to continue into the fourth quarter.
• The rise in consumer spending was accompanied by elevated inflation readings, particularly in services like housing. However, there is a belief that spending will cool off in early 2024 as accumulated pandemic savings are depleted.
• The strong consumer spending contributed to rapid economic growth, but it's unlikely to match last quarter's performance. Savings rates have dropped, and personal income has seen limited growth, which is causing concern about the sustainability of spending.
• Inflation remains a concern, with the Federal Reserve closely monitoring it. The Fed is expected to keep interest rates unchanged due to recent financial market conditions. Despite the inflation worries, some economists believe that U.S. households are financially healthy, with manageable debt levels and solid income.

(Source: Reuters)