US personal consumption spending for October is projected to rise 0.3% vs. the previous month in tomorrow’s update from the Bureau of Economic Analysis, based on The Capital Spectator's average econometric forecast. Today’s average projection is slightly above the previously reported 0.2% increase for September. Meanwhile, the Capital Spectator’s average 0.3% forecast for October matches the projections in three surveys of economists.
Here's a closer look at the numbers, followed by brief summaries of the methodologies behind The Capital Spectator's estimates:
VAR-3: A vector autoregression model that analyzes three economic time series in context with personal consumption expenditures. The three additional series: US private payrolls, personal income, and industrial production. The forecasts are run in R with the "vars" package.
R-1: A linear regression model that analyzes the historical record of personal consumption expenditures in context with retail sales. The historical relationship between the variables is applied to the more recently updated retail sales data to project personal consumption expenditures. The computations are run in R.