The Fed watches this measure more than others in their quest for a 2% rate of inflation - looks like a soft landing (no Recession) and future rate cuts - markets are happy:
(Reuters) - The personal consumption expenditures (PCE) price index rose 0.1% in August after an unrevised 0.2% gain in July the Commerce Department reported on Friday. Economists had forecast PCE inflation advancing 0.1%. In the 12 months through August, the PCE price index increased 2.2% after rising 2.5% in July.
The core PCE price index excluding the volatile food and energy components increased 0.1% after an unrevised 0.2% rise in July. In the 12 months through August, core inflation advanced 2.7% after climbing 2.6% in July. The U.S. central bank tracks the PCE price measures for its 2% inflation target.
COMMENTS:
QUINCY KROSBY, CHIEF GLOBAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NC (emailed note)
"The August PCE report supports the Fed's decision to go big on September 18, although the core year-over-year at 2.7% suggests that another round of 50 basis points needs to come under careful scrutiny unless the labor market suggests weakness.
"Although the Fed cannot declare complete victory on inflation, today's report - with 2.2% on the year-over- year headline - underscores that overall inflation continues to move decisively in the right direction.
"The equity futures across the board are applauding the numbers as the ten-year Treasury yield inches lower."
JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND, VA (emailed note)
"Inflation is no longer the story in the PCE data for the Fed. It’s now all about spending and keeping the economy strong. If you were second guessing the Fed going .50 in September, you aren’t now. These data suggest another .50 in November is likely."
Instant view: August US PCE inflation cools to within reach of Fed target
(Reuters) - The personal consumption expenditures (PCE) price index rose 0.1% in August after an unrevised 0.2% gain in July the Commerce Department reported on Friday. Economists had forecast PCE inflation advancing 0.1%. In the 12 months through August, the PCE price index increased 2.2% after rising 2.5% in July.
The core PCE price index excluding the volatile food and energy components increased 0.1% after an unrevised 0.2% rise in July. In the 12 months through August, core inflation advanced 2.7% after climbing 2.6% in July. The U.S. central bank tracks the PCE price measures for its 2% inflation target.
COMMENTS:
QUINCY KROSBY, CHIEF GLOBAL STRATEGIST, LPL FINANCIAL, CHARLOTTE, NC (emailed note)
"The August PCE report supports the Fed's decision to go big on September 18, although the core year-over-year at 2.7% suggests that another round of 50 basis points needs to come under careful scrutiny unless the labor market suggests weakness.
"Although the Fed cannot declare complete victory on inflation, today's report - with 2.2% on the year-over- year headline - underscores that overall inflation continues to move decisively in the right direction.
"The equity futures across the board are applauding the numbers as the ten-year Treasury yield inches lower."
JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND, VA (emailed note)
"Inflation is no longer the story in the PCE data for the Fed. It’s now all about spending and keeping the economy strong. If you were second guessing the Fed going .50 in September, you aren’t now. These data suggest another .50 in November is likely."
