US consumer spending stagnant in September, economic momentum shows signs of fatigue under inflation pressure.

The latest data shows that consumer spending in the United States in September was almost stagnant, indicating that under the stubborn pressure of inflation, the American people were already showing fatigue before the government shutdown. Data released by the Bureau of Economic Analysis (BEA) shows that after adjusting for inflation, personal consumption expenditure (PCE) in September barely grew, with the previous figure being revised down to 0.2%. This report, originally scheduled to be released on October 31st, was delayed due to the government shutdown and was announced this week. The core PCE price index, excluding food and energy, rose by 0.2% month-on-month and by 2.8% year-on-year, indicating that inflation cooling still remains uneven. The slowdown in consumption means that the main driver of economic growth in the United States had already begun to slow down before entering the longest government shutdown in history on October 1st. However, more recent holiday sales data shows that demand remains resilient. Data from Mastercard SpendingPulse shows that sales on this year's Black Friday (excluding car dealers) increased by 4.1% year-on-year, higher than last year's 3.4%. However, this growth is mostly driven by high-income groups, while ordinary consumers are becoming more cautious due to weakening job prospects and high prices. Consumer sentiment saw its first increase in five months in early December. The University of Michigan's preliminary index rose from 51 in November to 53.3, higher than the economist's median forecast of 52, reflecting that households are more optimistic about their future personal financial situation. Consumers expect prices to rise by 4.1% in the coming year, the lowest since January of this year; and inflation expectations for the next five to ten years have dropped to 3.2%. Despite the improved expectations, consumers generally feel pressured by the continued high cost of living. Concerns in the labor market are on the rise. Surveys show that more than half of workers are worried about unemployment, with nearly half believing that it would take four months or longer to find a job of equal quality if they were to become unemployed. The increasing number of layoff announcements by large companies has made concerns about future employment more evident. Although the employment expectations index has risen to a four-month high, the current situation index has dropped to a record low. Weak spending and the widening decline in goods consumption are mutually reinforcing. The BEA stated that consumer spending on goods in September recorded the largest decline since May, with significant declines in automobile, clothing, and footwear shipments, consistent with the slowdown in electronics, apparel, and sporting goods sales in previous retail sales reports. Several companies mentioned in their financial reports that the middle class is being affected by a weak labor market and tight household budgets, with retailers like Kroger under significant pressure, while consumers are turning more to discount channels like Dollar General and Five Below. In terms of income, after adjusting for inflation, disposable income has been stagnant for the second consecutive month, but nominal wages have increased by 0.4%, and asset income growth also provides support for high-income families, with the savings rate remaining at 4.7%. The current data has intensified internal divisions within the Federal Reserve on whether to continue cutting interest rates next week. Some officials are inclined to cut rates to support the slowing job market, while others are concerned about the persistently high inflation. This "lagging but mild" inflation and spending report provides additional support for those who advocate for rate cuts, and the market generally expects the Federal Reserve to cut rates once again. After the data was released, S&P 500 futures and US bond yields maintained an upward trend. With the government shutdown still ongoing, the BEA has not announced a new schedule for the release of the October consumption report, which was originally scheduled to be released on November 26th.