The Bureau of Economic Analysis gave their PCE )Personal Consumption Expenditures (PCE) Price Index) report and it came in better than expectations. However, the financial markets had mostly been expecting a report with no inflation. The Bond and stock market are already been pricing in a Federal Reserve interest rate cut in March 2024.
Inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, came in better than the overall market expectation. The monthly PCE was 0.1% (actual exact measurement was 0.07%). The annual deflator was 2.6% vs 2.8%. monthly deflator -0.1%. Durable goods 5.4% vs 2.3% which is good for consumer spending. The report also further reduced prior revisions. They revised the prior month annual deflator from 3.0% to 2.9%. The only strength was in anti-recession components.
Nick Timiraos (aka Nikileaks) was exactly right for his prediction from yesterday. Nick follows the analysts for the major banks who have historically been the most accurate. Nick Timiraos is chief economics correspondent for The Wall Street Journal, where he is responsible for covering the Federal Reserve and other major developments in U.S. economic policy.
The core PCE price index rose 3.2% in November from a year earlier.
Over the last six months, the core PCE price index rose 1.9% at an annualized rate.
(Over the previous six months, it rose 4.5%, annualized.) https://t.co/Is7poxn3Te pic.twitter.com/z2ExPiHBEn
— Nick Timiraos (@NickTimiraos) December 22, 2023
The November PCE price index is likely to show core inflation was very mild (between 0.0% and 0.1%, even though consensus is 0.2%), according to the forecasters who calculate this most carefully
That would lower 12-month core PCE inflation to 3.1% and 6-month annualized, to 1.9% https://t.co/tbufAyfWo1 pic.twitter.com/trLXFK2ax7
— Nick Timiraos (@NickTimiraos) December 22, 2023
The PCE price index fell (minus 0.07%) in November and was up 2.6% over the last 12 months pic.twitter.com/ngPyyPGjjL
— Nick Timiraos (@NickTimiraos) December 22, 2023
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