The latest data indicate that the consumer is still king, maintaining the trend that has prevailed over most of this business cycle. However, the exceptional strength in consumer spending at present seems to be related to tax cuts. Such vigorous growth will likely moderate in 2019, when the impact from tax reform starts to fade. Nevertheless, continued growth in personal income will support gains in personal spending. Core inflation anchored at the Fed’s target for several consecutive months will reassure central bank officials that they need to continue gradually removing policy accommodation.

Source: Los Angeles Times October 29, 2018 17:03 UTC