The Fed’s favorite inflation indicator – Core PCE (a measure of price changes in consumer goods and services that excludes volatile food and energy costs) – rose o.4% MoM in January (in line with expectations) with YoY rising by 3.1% (as expected), slightly higher than the 3.0% in December…
Source Bloomberg
That is the highest YoY Core PCE since March 2024.
The headline PCE rose 0.3% MoM (as expected) driving prices up 2.8% YoY (down from December’s +2.9% YoY)…
Source Bloomberg
Services continue to dominate the prices gains with Goods costs dropping very marginally in January…
Source Bloomberg
Higher prices were met with higher incomes and higher spending (rising in line with one another for a change)…
But spending growth continues to outpace income growth
But, thanks to yet more revisions, the savings rate ticked up to its highest since July…
With rate-cut expectations already plummeting, this latest data will do nothing to support a dovish take going forward (unless oil crashes the global economy).
