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US September incomes up, inflation still muted

WASHINGTON - US incomes rose in September and consumer prices posted a modest increase, the Commerce Department said on Thursday in a report implying little problem with inflation.

The department said personal incomes grew at a 0.4 percent annual rate in September, in line with Wall Street economists’ expectations and the same as a revised 0.4 percent gain in August.

The growth in incomes outstripped spending, which picked up at a 0.3 percent rate, down from a revised 0.5 percent increase in August. The rise in spending was slightly below forecasts for a 0.4 percent gain.

Both overall and so-called core prices that exclude food and energy items rose at a 0.2 percent rate. The rise in September core prices was double the 0.1 percent rise in August and was in line with economists’ forecasts.

On a year-over-year basis, core prices were up just 1.8 percent, the same as in August. Department officials said last month that the 1.8 percent rise in year-on-year prices was the smallest in 3-1/2 years.

US Treasury debt prices gained modestly as the core price rise met traders’ expectations but stock futures were lower.

The monthly income and spending figures already were incorporated in the third-quarter report on gross domestic product the Commerce Department issued on Wednesday, making them of marginal market interest.

Federal Reserve policy-makers said on Wednesday, when they announced a quarter-percentage-point cut in the trendsetting federal funds rate, that they continued to monitor prices carefully. The Fed cited concern about the potential for inflation but there was little in the personal incomes report to suggest prices were accelerating.