Executive Summary

• The US unemployment rate was unchanged in August, versus an expected drop of 10 basis points. Total nonfarm payroll employment increased by 151,000.
• Real personal consumer expenditures (PCE) dropped by 0.1% month over month in August, while real disposable income rose by 0.1% month over month.
• The core PCE deflator, which excludes food and energy prices, increased by 1.7% year over year for the month; the rate was slightly below the Federal Reserve’s target of 2%.
• The gas price rose moderately from August, reaching US$2.241 per gallon on October 16, 2016. The production cut by the Organization of the Petroleum Exporting Countries (OPEC) and crude oil hovering above US$50 a barrel tend to drive gas prices higher, which reduces consumption spending in other categories.
• Real PCE dropped by 0.1% month over month in August, while real disposable personal income ticked up by 0.1%.