The May 2019 personal income and spending report:
- Prior was 1.6% unrevised
- PCE core MoM 0.2% vs 0.2% expected
- Prior MoM 0.2% unrevised
- Deflator YoY 1.5% vs 1.5% expected
- Prior deflator YoY 1.6% vs 1.5% previously
- Deflator MoM 0.2% vs 0.2% expected
- Prior MoM unrevised at 0.3%
Consumers spending and income for May:
- Personal income 0.5% vs 0.3% expected. Prior month 0.5% unrevised
- Personal spending 0.4% vs 0.5% expected.Prior month 0.6% vs 0.3% previously reported
The PCE is the favored inflation measure for the Fed. This report continues to show inflation comfortably below the 2% target (and some Fed officials want to see inflation running hot to make up for the tame readings). The chart below shows the core PCE and apart from a 1 month spike to 2.1%, the core PCE has been below the 2.0% since mid June 2012. This does not hurt the case for Fed cut(s) because of the fear of low inflation expectations.
Good news on income and spending with decent numbers. Spending (which is 2/3 of US GDP) was revised higehr as well. Dualing 0.5% income gains also good.
