TIP - PCE March 2024:  Spending And Inflation Too Hot

2024-04-26 11:00:11 ET

Summary

• Real PCE (adjusted for inflation) in March 2024 expanded by +0.51%, surpassing economists' median forecast of +0.30% growth.
• The analysis of the PCE data suggests that the U.S. economy is not "landing" as personal spending and inflation grew at higher rates than expected.
• There are under-appreciated risks to the inflation outlook, including potential oil price shocks, which could lead to a significant tightening of financial conditions in the second half of 2024.

The Bureau of Economic Analysis ((BEA)), has just released its estimate for March 2024 US Personal Consumption Expenditures ((PCE)). Also known as “Personal Spending,” PCE directly accounts for over 60% of total US Gross Domestic Product ((GDP)), marking it a crucial indicator for assessing changing rates of expansion, contraction, and momentum in U.S. economic activity.

According to the BEA, Real PCE (adjusted for inflation) expanded by +0.51% — an upside surprise of +0.21% compared to the median forecast of professional economists which expected +0.30% growth....

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