December 6, 2022

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US June PCE core inflation 3.5% y/y vs 3.7% expected

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US June PCE core inflation 3.5% y/y vs 3.7% expected


Highlights of the Fed’s personal consumption expenditure report

US core PCE inflation
  • Prior was 3.4%
  • Headline PCE 4.0% y/y vs +3.9% prior (revised to 4.0%)
  • PCE core MoM +0.4% vs +0.6% expected
  • Prior MoM +0.5%
  • Deflator MoM +0.5% vs +0.4% prior
  • Full report
Consumer spending and income for June:

  • Personal income +0.1% vs -0.3% expected. Prior month -2.0%
  • Personal spending +1.0% vs +0.7% expected. Prior month -0.1%
  • Real personal spending +0.5% vs -0.6% prior

This is another sigh of relief for markets. I think the flat headline is important as well. We’ve likely seen the highs now and we can already see the goods inflation and energy inflation rates are turning lower y/y:

  • Goods +5.2% vs +5.4% prior
  • Durable goods +7.2% vs +6.9% prior
  • Services +3.3% vs +3.2% prior
  • Energy +24.2% vs +27.3% prior
  • Food +0.9% vs +0.7% prior

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