The major averages unable to hold their early gains slipped into the red to begin the week, on generally positive economic data.
Personal income increased a slightly less than expected .2% in September, a 13-month low. Weakness was seen in small business or proprietor’s income at -.8% and wages and salaries at +.2%. On a year ago basis before inflation, nominal income growth was an ok 4.4%. The inflation measuring Personal Consumption Expenditures Deflator or PCE advanced .1%, on a year ago basis the PCE advanced 2% and has declined steadily since the summer after peaking at 2.3%. Goods prices slipped for a 3rd month in the last 4. Motor vehicle, parts, gasoline and energy prices fell as well.
Personal spending increased .3% in September on gains in durable goods as the tax cuts continue to drive more debt funded growth. While the mainstream media advances its everything is just wonderful cheerleading, cracks grow in real estate. The more than doubling of applied tariffs January 1st to 25% from 10% on some 200 billion in Chinese imports will not go unnoticed by consumers as the trade war enters a new phase.
The Texas manufacturing survey advanced 1.3 points in October to 29.4. The details were largely unremarkable, price data jumped.
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