US: Personal income and spending report in focus - TDS

Research Team at TDS, suggests that in the US, the inflation returns to the forefront with the release of the personal income and outlays report for August.

Key Quotes

“We are roughly in line with the consensus across all facets of the report, with both TD and the market calling for an increase of 0.2% m/m in the headline and core PCE deflator. This would allow core PCE inflation to accelerate from 1.6% y/y to 1.7% y/y while headline PCE inflation should push higher to 0.9% y/y.

TD expects consumer spending to rise by 0.2% m/m which represents a slowdown from the robust PCE growth in recent months and would leave real PCE unchanged; the market looks for a more conservative 0.1% m/m on a nominal basis.

Lastly, both TD and the market look for personal incomes to post a 0.2% m/m advance. Later in the morning we will see the September print for both Chicago PMI as well as University of Michigan Sentiment. TD looks for an above-consensus print on the Chicago PMI of 52.5, partially reversing the sharp declines in August (mkt: 52.0). Meanwhile, we expect the revisions to the University of Michigan survey to be to the downside with a 89.0 print while the market looks for a slight upward revision to 90.0.”