Consumer Spending Outpaces Income Growth as Inflation Erodes Savings

Consumer spending grew 0.7% in September while income only grew 0.3%, draining savings.

High inflation and interest rates haven't slowed consumer spending yet, but it's unclear if budgets can sustain it.

Savings rate fell to 3.4% in September, the lowest since December 2019.

Inflation-adjusted disposable income fell for the 4th straight month as spending outpaces income.

Aggressive rate hikes by the Fed haven't slowed spending yet, meaning more rate hikes may be needed.