The U.S. income report
The U.S. income report revealed a firm 0.6% October income rise, and though analysts saw a lean 0.3% consumption increase analysts still got the expected 0.1% "real" gain. October increases followed upward income revisions in Q2 and Q3 alongside consumption boosts in Q3, as revealed in yesterday's GDP report. The report beat expectations overall due partly to a skewing of Q3 income and consumption strength toward September that lifted the entry to Q4. Analysts saw a lean 0.2% chain price rise that explained the headline consumption undershoot, and a savings rate pop to 6.0% that leaves room for a big fall into 2017 that lefts consumption relative to income, as analysts have yet to unwind the lofty Q1 average rate of 6.1%. Analysts left our Q4 GDP growth estimate at 1.8% after Tuesday's reported Q3 pace of 3.2%, though analysts raised our real Q4 consumption growth forecast to 2.3% from 2.0%, after a 2.8% Q3 clip. In nominal terms, consumption is poised for a solid price-led 5.0% growth pace in Q4 after a 4.2% Q3 clip, with a projected oil-led 2.7% Q4 chain price rise after a 1.4% Q2 rate of climb.