Personal income and spending data usually don’t move the market, but embedded in that report is the savings rate, a number the market has become very interested in. As the US economy has weakened and consumers have worked to repair balance sheets, spending has fallen and savings has risen.
This is a long-term economic plus for the dollar, as it helps balance the current account deficit but it is a short-term negative, as it signals the consumer-driven US economy will be slow to mend without the usual high consumption levels. A classic Catch-22.
Incomes are expected to be flat in September with consumption seen falling 0.5%, which would imply a rising savings rate.