Data issued earlier this morning by the U.S. Commerce Department affirmed that both personal income and personal consumption expenditures had increased during September. In all, income rose by 0.4% last month, which was as expected. The rate of gain also was four times the unrevised increase of 0.1% in personal income tallied in August.

At the same time, personal consumption expenditures jumped by 0.8% last month, which was better than both the estimated gain of 0.6% for the month and the unrevised 0.5% rise tallied in August. These back-to-back spending increases are critical and should help keep the expansion on sound footing for the next few months, at least. In all, such spending accounts for some two-thirds of aggregate business activity across the country.

Meanwhile, the price index for personal consumption expenditures gained 1.7% in September from a year earlier. That is the Federal Reserve's preferred gauge for inflation. The 1.7% year-over-year increase was, importantly, below the Fed's annual preferred inflation target of 2.0%. Such tame inflation, it is assumed, will allow the central bank to maintain its accommodative monetary policies for the months to come.

All in all, these reports were decent and should not alter our expectation that the nation is well along on a modest, but sustainable, economic recovery that could well last for several more years.  

At the time of this article's writing, the author did not have positions in any of the companies mentioned.