- Prior was 3.8%
- Headline m/m +0.4% vs +0.5% expected
Core PCE (excluding food & energy):
- Core y/y 3.4% vs +3.4% expected
- Prior was +3.3%
- Core m/m +0.3% vs +0.3% expected
- Prior +0.2%
- Ex food, energy and housing +0.3% vs +0.2% prior
Consumer spending and income for February:
- Personal income +0.7% vs +0.4% expected. Prior month 0.0%
- Personal spending +0.7% vs +0.6% expected. Prior month +0.5
- Real personal spending +0.3% vs +0.1% prior
Headline inflation now has a four-handle but the dollar was lower on the headlines because there were fears it would be even higher, and force the Fed to hike as soon as July. Instead, inflation looks to have levelled off once you factor in the big reversal in oil prices that has continued today, with WTI down another 52 cents to $69.82.
For background, personal Consumption Expenditures (PCE) price index is the Federal Reserve’s preferred gauge of inflation. It is published monthly by the Bureau of Economic Analysis as part of the Personal Income and Outlays report, and it measures the change in prices of goods and services purchased by US consumers. Because it accounts for shifts in consumer behavior—such as substituting chicken for beef when beef prices rise—it tends to run cooler than the Consumer Price Index. The report includes both a headline figure and a “core” measure that strips out food and energy, the two categories where prices swing most sharply, giving a clearer read on the underlying trend.
In April, the headline PCE price index rose 0.4% on the month and 3.8% from a year earlier, up from 3.5% in March. Core PCE increased 0.2% on the month and 3.3% annually, edging higher from 3.2% the prior month. Goods prices were down 0.1% on the month but up 1.2% year over year, while services prices rose 0.2% on the month and 2.5% annually. Personal income was essentially flat, consumer spending rose 0.5%, and the personal saving rate fell to 2.6%.
This article was written by Adam Button at investinglive.com.