Highlights of the February 2018 PCE report
- Prior was +1.5% y/y
- Core PCE +0.2% m/m vs +0.2% m/m expected
- Prior m/m +0.3% (unrevised)
- Deflator +1.8% y/y vs +1.7% expected
- Deflator +0.2% m/m vs +0.2% expected
Very close to expectations except the headline, which is a bit bullish for the US dollar.
- Personal income +0.4% vs +0.4 expected
- Personal spending +0.2% vs +0.2% exp
- Real personal spending 0.0%
- Prior real personal spending -0.1% (revised to -0.2%)
- Savings rate 3.4%
Everything was almost bang-on expectations but the minor revision to real spending is a bit negative for growth and the dollar.
On net, the market isn't going to have much to worry about from the headlines.
Joe Brusuelas from RSM notes that on a three-month annualized basis, personal spending is running at 4.9% and that it's likely to accelerate in the month ahead.
"The slower pace of spending is indicative of the normal post holiday hangover in spending and late arrival of tax cuts. Investors should anticipate a strong rebound in March ahead of the traditional Easter holiday," he said.
