AFMC - PCE Report: The 'Inflation Bump' Just Got Bigger
2024-03-30 08:38:23 ET
Summary
- The January core PCE data spiked by 0.5%, after the revision - that's significant.
- The February core PCE confirms that inflationary pressures are building.
- Thus, the Fed is unlikely to cut in June, and the stock market could sharply correct if this is confirmed with the March CPI data.
The February PCE inflation report
The US Bureau of Labor released the February PCE inflation data. The highlights are:
- the core PCE inflation increased by 0.3% MoM, as expected, and 2.8% YoY also as expected, down from 2.9% in January - so technically the disinflationary process continues.
- the headline PCE inflation also increased by 0.3% MoM, which is below the 0.4% consensus expectations, and 2.5% YoY as expected, but that's higher compared to the January reading of 2.4% - thus the headline PCE inflation is on the rise.
- However, it is important to point out that there were significant revisions to the January PCE inflation readings.
- the core PCE inflation for January was revised higher from 0.4% MoM to 0.5% MoM.
- the headline PCE inflation was also revised higher from 0.3% MoM to 0.4% MoM.