- Prior month YoY Core PCE 3.2%, headline 3.5%
- Core PCE YoY 3.3% vs 3.3 est.
- Core PCE MoM 0.2% vs 0.3% est
- Headline PCE YoY 3.8% vs 3.8% est
- Headline PCE MoM 0.4% vs 0.5% est.
- PCE Ex Food, energy and housing for April 0.2% vs 0.3% last month
- PCE services. Ex Energy and housing for April 0.1% vs 0.3% last month
Real PCE increased $18.1 billion or 0.1% at a monthly rate) in April.
The Personal income and Personal consumption data for April
- Personal Income MoM for April 0.0% vs 0.4% estimate. Prior 0.6% revised to 0.5%
- Personal consumption for April 0.1% vs 0.3% last month (revised from 0.2%.
- Personal saving was $611.7 billion in April, and the personal saving rate—personal saving as a percentage of DPI—was 2.6 percent.
The decrease in current-dollar personal income in April primarily reflected a decrease in farm proprietors’ income that was partly offset by an increase in compensation.
The PCE data came in a little bit lower than expected on a month-to-month.. The year on year data came in as expected. US yields have moved lower with the 10 year up 0.6 basis points or 4.486%. The two year yield is up 1.4 basis points at 4.047%..
US stocks are still lower but off their lowest levels with the S&P down -1.36 points. He down thus far is -65 points, and the NASDAQ index down -27 points implied by the futures.
The USD has moved lower.
- The EURUSD have moved above the 100/200 hour MA at 1.1623 and 1.16287. The high price reached 1.1634 so far. Staying above 1.1623 is the close risk now for buyers.
- The USDJPY has moved to a new low at 159.34. On the downside, the 100 hour moving average at 159.19 and the 200 hour moving average at 159.086 are the next downside targets that if broken would increase the bearish bias from a technical perspective. On Tuesday, the low price installed against the rising 200 hour moving average increasing their levels of importance going forward.
- The GBPUSD has moved up to retest the 200 day moving average of 1.34203. Just above that is the 200 hour moving average is at 1.34315. The high price of just reach 1.3422 and currently trades at 1.3419. The 50% midpoint of the move up from the March low comes in at 1.3408 and is close risk for buyers looking for more upside momentum. Stay above is more bullish.
What is the PCE and why is it so important?
The U.S. PCE (Personal Consumption Expenditures) Price Index is one of the Federal Reserve’s preferred measures of inflation because it tracks how much consumers are paying for goods and services across the economy and adjusts for changes in consumer behavior. The report is released monthly by the Bureau of Economic Analysis (BEA) and includes both headline inflation and the closely watched “core” measure, which excludes food and energy prices because they tend to be more volatile.
The PCE report measures price changes across a broad range of categories including housing, healthcare, transportation, food, energy, and services. Unlike CPI, the PCE index allows for substitutions when consumers shift spending patterns — for example, buying cheaper alternatives when prices rise — making it generally viewed as a more flexible and comprehensive inflation gauge. The Fed’s long-term inflation target of 2% is based on the Core PCE Price Index, making the report especially important for interest rate expectations, bond yields, the U.S. dollar, and stock markets.
In addition to inflation data, the report also includes:
- Personal income
- Consumer spending
- Savings rate
As a result, markets use the report not only to monitor inflation pressures, but also to gauge the strength of the U.S. consumer and the broader economy.
In addition to the above the US 2nd revision to Q1 GDP was also released in the US.
- Prior estimate 2.0%. Q4 0.7%
- GDP 1Q +1.6% versus 2.0% expected
- Sales Preliminary 1.5% vs 1.7% estimate. Prior estimate 1.6%
- GDP consumer spending preliminary 1.4% versus 1.6% prior
- Deflatior 3.5% versus 3.6% preliminary
- Core PCE Q1 4.5% versus 4.5% preliminary
- PCE Q1 ex Food, energy and housing 4.7% versus 4.6% preliminary. Prior quarter to 20%
- PCE Q1 Services. Ex Energy and Housing 4.6% versus 4.4% preliminary. Prior quarter 3.6%
The Q1 GDP is in the rearview mirror and not the main focus. Markets are more focused on the PCE, Durable goods, etc.
