Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Consumers keep spending which is helping propel real GDP growth in an environment where it does not take much to spook investors. The treat is still-solid growth can help the Fed achieve a soft landing, but the trick is that could work against inflation hitting its 2% inflation target.
Don’t Let Them Bury Me, I’m Not Dead
Consumer resilience remained intact through September. Broad personal spending rose 0.5% last month amid upward revisions to prior data (chart). In real, or inflation-adjusted terms, spending was up a solid 0.4%.
The details reveal that households continued to spend broadly. Spending on autos was solid. Real spending in that category advanced 1.5%, somewhat reversing the August decline. At a time when financial markets are trying to better gauge where consumers are in terms of discretionary vs. non-discretionary outlays, spending at restaurants rose the most in a year and helped drive services consumption higher last month.