Registered Investment Adviser Caleb Lawrence
Despite slightly better than expected economic data the major averages struggled to begin the week entering the final hour with small losses. Texas manufacturing activity increased 6.3 points in October to 27.6 on broad based strength with the exception of the average workweek that slipped a little. Agricultural prices fell for a 3rd month in August with a 2% decline led by poultry, egg, commercial vegetable, and livestock prices.
Personal income advanced .4% in September pushing the year ago rate to a very respectable 3%. Solid gains were noted with proprietors or small business, and rental income. Real or inflation adjusted disposable income was unchanged with a 1.2% gain. The savings rate fell .5% to 3.1%. Personal spending jumped .6% led by a 9.9% gain in auto sales, likely a hurricane induced blip. The Personal Consumption Expenditures or PCE Deflator which measures price changes increased .4% in September driven by a 12.2% advance in gasoline and energy costs that will likely prove temporary compliments of the hurricanes. On a year ago basis prices advanced 1.6%, and remain below the Fed’s 2% target.