US Core PCE for April YoY 3.3% vs 3.3% estimate. MoM 0.2% vs 0.3% estimate

• Prior month YoY Core PCE 3.2%, headline 3.5%
• Core PCE YoY 3.3% vs 3.3 est.
• Core PCE MoM 0.2% vs 0.3% est
• Headline PCE YoY 3.8% vs 3.8% est
• Headline PCE MoM 0.4% vs 0.5% est.
• PCE Ex Food, energy and housing for April 0.2% vs 0.3% last month
• PCE services. Ex Energy and housing for April 0.1% vs 0.3% last month

The Personal income and Personal consumption data for April

• Personal Income MoM for April 0.0% vs 0.4% estimate. Prior 0.6% revised to 0.5%
• Personal consumption for April 0.1% vs 0.3% last month (revised from 0.2%.

The PCE data came in a little bit lower than expected on a month-to-month.. The year on year data came in as expected. US yields have moved lower with the 10 year up 0.6 basis points or 4.486%. The two year yield is up 1.4 basis points at 4.047%..

US stocks are still lower but off their lowest levels with the S&P down -1.36 points. He down thus far is -65 points, and the NASDAQ index down -27 points implied by the futures.

What is the PCE and why is it so important?

The U.S. PCE (Personal Consumption Expenditures) Price Index is one of the Federal Reserve’s preferred measures of inflation because it tracks how much consumers are paying for goods and services across the economy and adjusts for changes in consumer behavior. The report is released monthly by the Bureau of Economic Analysis (BEA) and includes both headline inflation and the closely watched “core” measure, which excludes food and energy prices because they tend to be more volatile.

The PCE report measures price changes across a broad range of categories including housing, healthcare, transportation, food, energy, and services. Unlike CPI, the PCE index allows for substitutions when consumers shift spending patterns — for example, buying cheaper alternatives when prices rise — making it generally viewed as a more flexible and comprehensive inflation gauge. The Fed’s long-term inflation target of 2% is based on the Core PCE Price Index, making the report especially important for interest rate expectations, bond yields, the U.S. dollar, and stock markets.

In addition to inflation data, the report also includes:

• Personal income
• Consumer spending
• Savings rate

As a result, markets use the report not only to monitor inflation pressures, but also to gauge the strength of the U.S. consumer and the broader economy.

In addition to the above the US 2nd revision to GDP was also released in the US.

• Prior estimate 2.0%. Q4 0.7%
• GDP 1Q +1.6% versus 2.0% expected
• Sales Preliminary 1.5% vs 1.7% estimate. Prior estimate 1.6%
• GDP consumer spending preliminary 1.4% versus 1.6% prior
• Deflatior 3.5% versus 3.6% preliminary
• Core PCE Q1 4.5% versus 4.5% preliminary
• PCE Q1 ex Food, energy and housing 4.7% versus 4.6% preliminary. Prior quarter to 20%
• PCE Q1 Services. Ex Energy and Housing 4.6% versus 4.4% preliminary. Prior quarter 3.6%

This article was written by Greg Michalowski at investinglive.com.