October Report: U.S. Economy in a Snapshot

• Real consumer spending growth softened in August. Real expenditures on services were essentially flat and nondurable goods spending grew only slightly, while real durables expenditures rose solidly.
• Real business equipment spending remained sluggish in 2019Q2, and its growth over the first half of 2019 was well below its pace in 2018. New orders of nondefense capital goods excluding aircraft fell modestly and were below shipments in August, indicating continued weak near-term momentum.
• Housing activity indicators displayed further gradual improvement in August. Single-family housing starts and permits have rebounded over the past three months. New and existing home sales rose in August. A still-strong labor market and low mortgage rates could continue to provide support to housing.
• Payroll growth was moderate in September, and a touch softer than that in August. The unemployment rate fell to its lowest level since 1969, the labor force participation rate was unchanged, and the employment-to-population ratio ticked up again. Labor compensation growth appears to have softened.
• Core PCE inflation firmed but remained below the FOMC’s longer-run objective.
• U.S. equity indices declined over the past month, while implied volatility rose. The nominal 10-year Treasury yield was roughly unchanged on balance, rising earlier in the month but declining subsequently. The market-implied expected policy rate path was below that from around the September FOMC meeting. The broad trade-weighted dollar index rose slightly.

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