US May PCE core +2.7% y/y vs +2.6% expected

Core:

• Prior was +2.5%
• Core m/m 0.2% vs +0.15% exp
• Unrounded core PCE +0.1788%
• Supercore (services ex-shelter)
• Services inflation

Headline PCE:

• Headline PCE +2.3% y/y vs +2.3% expected
• Deflator +0.1% m/m vs +0.12% expected
• Unrounded m/m +0.1358%

Consumer spending and income for March :

• Personal income -0.4% vs +0.3% expected. Prior month +0.8%
• Personal spending -0.1% vs +0.1% expected. Prior month +0.2%
• Real personal spending -0.3% vs +0.1% prior
• Savings rate

USD/JPY was trading at 144.58 ahead of the data.

This isn’t a great report on a couple fronts. The headline was in-line (though a touch high unrounded) but core was hotter than expected. The income side was weak and so was spending, which fits in with some of the corporate commentary we’ve heard (like Target).

This article was written by Adam Button at www.forexlive.com.