Spending inches up, construction down

Consumer spending rose slightly in October, while incomes increased at a smaller-than-average rate, according to a Department of Commerce report. The price index for personal consumption expenditures (PCE) increased 0.3% for the second consecutive month in October. The core PCE price index — which excludes food and energy — rose 0.2% for the second consecutive month. Personal income grew at a 0.2% clip in October, short of the 0.4% increase recorded in September. The October PCE reading is 2.9% higher than it was a year earlier, up from the 2.4% year-over-year increase recorded in September. The core PCE increased 1.9% year-over-year for the second consecutive month in October. The Federal Reserve prefers that the core PCE stays in the 1.0% to 2.0% range. Real spending — excluding inflation — was unchanged in October, after increasing 0.1% the previous month. The Department of Commerce also reported that spending on construction fell 0.8% in October, driven by a decline in private home building. The decline to a $1.158 trillion seasonally adjusted annual rate came after a revised 0.2% increase in September, which was revised down from a 0.3% increase. Spending on private home building fell 2% in October to $503.7 billion, below the revised September rate of $514.3 billion.