The Fed’s favorite inflation indicator – Core PCE – printed cooler than expected in March, unchanged MoM (vs +0.1% exp), bring prices up 2.6% YoY – the lowest since March 2021…
Source: Bloomberg
…with non-durable goods deflating MoM the biggest drag on Core PCE
…but, but, but we were told tariffs would spark hyper-super-scary-inflation?
The headline PCE was -0.045% MoM – the biggest MoM drop since COVID lockdowns…
…dragging headline PCE YoY down to +2.3%…
SuperCore PCE also saw the YoY pace slow significantly…
Spending outpaced incomes significantly in March…
Source: Bloomberg
Which means that the savings rate fell to 3.9% from 4.1% in February, which was revised lower from 4.6%…
Adjusted for inflation, real personal spending surged 0.7% MoM (not a total surprise given that ‘consumers’ are panicking over an imminent surge in inflation, of course they should be spending)….
It appears DOGE is doing its jobs too – crushing govt wage growth
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March Government worker wages and salaries up just 2.9%, down from 3.2% in Feb and the lowest since Sept 2020
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March Private worker wages and salaries up 5.4%, down from 5.7%, and lowest since Dec 2022
…and there goes the stagflation scenario.
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