Personal consumption expenditures was up by 0.5% in September following a 0.1% dip in August, according to the most recent data release from the Bureau of Economic Analysis. Personal income edged up by 0.3%, largely driven by an increase in employee compensation.

Disposable personal income – income remaining after deducting personal income taxes – continued its steady growth. In September, disposable personal income was 2.1% higher than a year ago.

In September, 5.7% of disposable income went to personal savings, down from 5.8% in August. The savings rate was on a downward trend from earlier 2016, when it peaked at 6.2%. The savings rate rose with the onset of the Great Recession as households repaired their balance sheets. However, this process of deleveraging held back GDP growth due to reduced consumption.

Tags: economics, PCE, personal income, savings rate