After slowing in September, Americans' personal income and spending data was expected to re-accelerate in October and they did dramatically, rising 0.5% and 0.6% MoM respectively.

This is the biggest monthly spike in 2018...

However, one look between the line reveals that not all is as good as it seems: according to the US govt, "incomes were boosted by an $11.6 billion increase for farmers, which includes the subsidy payments. And the biggest contributor to the increase in services spending was household electricity and gas, which tends to reflect weather swings."

On a year over year basis, both income and spending re-accelerated, rising 4.3% and 5.0% respectively...

Wages for private workers jumped, rising 4.7% Y/Y while wages for government workers saw a 2.9% increase from the prior year.

With spending continuing to outpace income, personal savings data (revised historically) fell to 6.2% in October, lowest since Dec 2017...

Ironically, as the income and spending data jumped, The Fed's favorite inflation indicator - Core PCE - slowed notably to +1.8% YoY...

Ahead of the print, when commenting on the core PCE, Nomura's Bilal Hafeez said that "lower oil prices will naturally lead to lower headline numbers in the coming months. It could mean that the 2.3% seen in July may well be the peak inflation rate in the latest phase of the US cycle. As for core inflation, this year’s strong dollar could end up weighing on inflation. History certainly points in that direction (see chart)."

So take your pick - Dovish Fed signals from Core PCE or hawkishg Fed signals from income/spending/savings data?