Advertisement
Advertisement

US PCE Inflation Softer-than-Expected

By:
James Hyerczyk
Updated: Sep 29, 2023, 14:18 GMT+00:00

The Commerce Department noted a 0.4% rise in August's PCE price index, versus the expected 0.5% increase.

US PCE Index

Highlights

  • Core PCE comes in at 0.1%, lower than the 0.2% forecast. 
  • Personal Income rose 0.4%, matching the estimate. 
  • Personal Spending gained 0.4%, below the 0.5% forecast. 

US Personal Income, Expenditure and Inflation Analysis, August 2023

In August, a significant highlight was the augmentation in personal income by $87.6 billion or 0.4%. The landscape of disposable personal income (DPI) also evolved, registering an increase of $46.6 billion (0.2%). This movement shadowed the personal consumption expenditures (PCE), which surged by $83.6 billion or 0.4%.

Fluctuations in Consumer Price Dynamics

The Bureau of Economic Analysis recorded the PCE price index escalating by 0.4% in the same month. An intriguing observation is the resilience of this index even after omitting volatile sectors such as food and energy, indicating a rise of 0.1%. A wider lens into the year reveals a leap of the PCE price index by 3.5%, underscoring the intrinsic inflationary pressures. It’s noteworthy that the core PCE index, after extracting the impact of food and energy, reported a subdued growth of 0.1%, contrary to the Wall Street Journal’s anticipated 0.2% climb.

Decoding Consumer Behavior and Spending Patterns

The ripple effect of the increment in personal income is observed in the consumer sphere as well. The PCE’s current-dollar surge of $83.6 billion mirrors the expansion in spending for services by $47.0 billion and goods by $36.7 billion. Distinct contributors in this realm were the housing and utilities sectors, transportation services, and a pronounced spending in the healthcare landscape.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?

Advertisement