by Calculated Risk on 11/25/2020 10:24:00 AM

The BEA released the Personal Income and Outlays report for October:

Personal income decreased $130.1 billion (0.7 percent) in October according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $134.8 billion (0.8 percent) and personal consumption expenditures (PCE) increased $70.9 billion (0.5 percent).

Real DPI decreased 0.8 percent in October and Real PCE increased 0.5 percent. The PCE price index was unchanged from September. The PCE price index excluding food and energy was also unchanged.
emphasis added

The October PCE price index increased 1.2 percent year-over-year and the October PCE price index, excluding food and energy, increased 1.4 percent year-over-year.

The following graph shows real Personal Consumption Expenditures (PCE) through October 2020 (2012 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was much lower than expected,  and the increase in PCE was above expectations.

Note the red line for Q3 (the quarterly level of PCE).   This was 3.3% below the Q4 2019 level for PCE.

Also note: If real PCE in November and December are just at the same level as in October, PCE will increase at a 6% annual rate in Q4.