Highlights of the monthly PCE report:
- June PCE deflator was 1.3%
- Core July PCE 1.2% vs 1.3% exp
- Personal income +0.1% vs +0.2% exp
- Personal spending +0.1% vs +0.3% exp (prior revised to 0.6% from 0.5%)
The PCE report is the Fed’s preferred measure of inflation and the headline trended in the right direction but the soft core numbers and the weak consumer spending/income are what stands out in this report. None of those are particularly good news for the Fed and USD/JPY edged lower.
