US PCE data for August

  • August PCE deflator 0.1% versus 0.1% expected. Prior month 0.1%
  • core PCE on come on 0.0% versus 0.1% expected. prior month 0.2%
  • PCE deflator year on year 2.2% versus 2.2% expected. prior months 2.3%
  • PCE deflator core year-over-year 2.0% versus 2.0% expected. Prior month 2.0%
  • personal spending rose 0.3% versus 0.3% expected. Prior month 0.4%
  • personal income rose 0.3% versus 0.4% expected. Prior month 0.3%
  • Real personal spending rose 0.2% (as expected). The prior month was revised up to 0.3% from 0.2%
  • The savings rate came in unchanged at 6.6%

There was not a lot of divergence from the expectations for the PCE and personal income and spending data for the month of August although the increase in spending remained steady.

Other thoughts on the data:

  • spending was driven by outlays on healthcare.
  • Motor vehicle purchases weaker
  • adjusted for inflation consumer spending rose 0.2% versus 0.3% in the prior month
  • spending on goods increased 0.3% likely as a result of higher gasoline prices
  • outlays on services advanced 0.4% (healthcare much of the increase)
  • the core PCE remained at 2%. That is in line with the Feds inflation target. The core PCE is thought to be the Feds preferred inflation measure
  • Wages jumped 0.5%