Core PCE Prices in December at 6 Month Annualized 1.9%, Below Fed’s 2% Target

The core PCE Price Index, which is the Fed’s preferred inflation gauge, rose 0.2% in December (consensus 0.2%) following a 0.1% increase in November. This is the sixth month in the last seven where monthly inflation has printed at a rate equal to or below the Fed’s 2% target. The PCE Price Index rose 0.2% in December (Briefing.com consensus 0.2%) following a 0.1% decline in November. With the December changes, the PCE Price Index was up 2.6% year-over-year, unchanged from … Continue reading “Core PCE Prices in December at 6 Month Annualized 1.9%, Below Fed’s 2% Target”

First Decline in PCE Prices since 2020, Soft Landing Case Boosted by Real Disposable Personal Income

The Federal Reserve’s preferred inflation gauge, the core PCE Price Index, which omits food and energy, increased 0.1% month-over-month (consensus 0.2%), taking the year-over-year change to 3.2% from 3.4%. The PCE Price Index declined 0.1% month-over-month consensus 0.1%), taking the year-over-year change to 2.6% from 2.9% in October. That was the first decline in the PCE Price Index since 2020. Prices are moving in the right direction for the Fed, but caution needed as Fed speakers’ remarks remind to think … Continue reading “First Decline in PCE Prices since 2020, Soft Landing Case Boosted by Real Disposable Personal Income”

Chicago Economic Activity Surprises with ISM Sharp Jump into Growth in November

The Chicago Business Barometer or Chicago PMI jumped unexpectantly to 55.8 in November well above consensus 45.0 and up from 44.0 in October. The latest data was the first month of growth in Chicago’s economic activity since August 2022 which had seen a contraction in business activity in the Chicago region until this month. Below the 50 threshold indicates economic contraction. The surprise came as high interest rates and inflation had continued to drag down the US manufacturing sector, however … Continue reading “Chicago Economic Activity Surprises with ISM Sharp Jump into Growth in November”

US ISM Services Sector PMI in October Shows Tenth Consecutive Month of Expansion

The ISM Non-Manufacturing Index or Services PMI decreased to 51.8% in October (consensus 53.0%) from 53.6% in September. The dividing line between expansion and contraction is 50.0%, meaning in October services are still in expansion, but at a slower pace than September. October marked the tenth consecutive month of growth for the services sector. The trend tempers hard-landing fears and presumably and have contributed to the Fed’s inclination to implement additional tightening. The easrly release of a slowing jobs market … Continue reading “US ISM Services Sector PMI in October Shows Tenth Consecutive Month of Expansion”

Yearly Core PCE inflation Eased in September, Though Monthly Prices Continue to Stick

The Federal Reserve’s preferred inflation gauge, the annual core PCE Price Index, which omits food and energy, eased slightly to 3.7%, the lowest since May 2021, but held sharply above the central bank’s target of 2%. For the month it increased by 0.3% from the previous month in September of 2023, the most in 4 months per market expectations. and accelerating from the 0.1% increase in August. PCE rose 0.4% month-over-month, the same as in August and above market forecasts … Continue reading “Yearly Core PCE inflation Eased in September, Though Monthly Prices Continue to Stick”

Federal Reserve Beige Book Highlights Labor Market Tightness Continued to Ease

The Federal Reserve released its Biege Book Wednesday prepared at the Federal Reserve Bank of St. Louis based on information collected on or before October 6, 2023. The report said most Districts indicated little to no change in economic activity since the September report. Consumer spending was mixed, especially among general retailers and auto dealers, due to differences in prices and product offerings. Labor market tightness continued to ease across the nation. Most Districts reported slight to moderate increases in … Continue reading “Federal Reserve Beige Book Highlights Labor Market Tightness Continued to Ease”

Core PCE inflation Decelerated in August, Though Energy Prices Cause Concern

The Federal Reserve’s preferred inflation gauge, core PCE Price Index, which omits food and energy, came in lower than consensus rising 0.1% (consensus 0.4%) in August. Core-CPE Price Index decelerated to 3.9% yr/yr from an upwardly revised 4.3% (from 4.2%) in July. The key takeaway core price growth was a cooler than expected, though the overall report showed price pressures remain and the surge in energy prices to factor in coming months. Prices as measured by the PCE index over … Continue reading “Core PCE inflation Decelerated in August, Though Energy Prices Cause Concern”

Federal Reserve Beige Book Highlights Consumers Exhausted Savings, Job Growth Subdued

The Federal Reserve released its Biege Book Wednesday prepared at the Federal Reserve Bank of Kansas City based on information collected on or before August 28, 2023. The report was consistent with economic growth being modest during July and August. Consumer spending on tourism was stronger than expected, surging during what most contacts considered the last stage of pent-up demand for leisure travel from the pandemic era. But other retail spending continued to slow, especially on non-essential items. Some Districts … Continue reading “Federal Reserve Beige Book Highlights Consumers Exhausted Savings, Job Growth Subdued”

Chicago Economic Activity Improves in August but Still in Contraction ISM PMI Shows

High interest rates and inflation continue to drag down the US manufacturing sector, however we have seen some improvement. The Chicago Business Barometer or Chicago PMI rose to 48.7 in August of 2023 from 42.8 in July, and well above market forecasts of 44.1. The reading marked the 13th consecutive month of contraction in business activity in the Chicago region but the smallest in the current sequence that began in September 2022. Below the 50 threshold indicates economic contraction. The … Continue reading “Chicago Economic Activity Improves in August but Still in Contraction ISM PMI Shows”

Core PCE inflation Rises to +4.2% from 4.1% in July Keeping Fed Awake

The Federal Reserve’s preferred inflation gauge, core PCE Price Index, which omits food and energy, came in per consensus at persistently high levels in July. Core-CPE Price Index was up 4.2%, versus 4.1% in June. The key takeaway from the report would have to be the uptick in the year-over-year inflation readings. Not alarming but the Fed will notice as it looks at a basis not to cut rates in the near future. Prices as measured by the PCE index … Continue reading “Core PCE inflation Rises to +4.2% from 4.1% in July Keeping Fed Awake”