US inflation: The Fed's preferred PCE core index slows in May
By The Forex Review - 11 / July / 22 531
Dominick Bell
Year-on-year and in May, the PCE core index grew by 4.7%, which is less than the + 4.8% expected by consensus, and slowed down compared to the previous growth of 4.9%. The monthly trend increased by 0.3%, which is less than the expected +0.4%.
The main headline PCE grew at an annualized rate of 6.3%, compared to April. On a monthly basis, the increase was 0.6%, accelerating from +0.2% in the previous month.
Personal income rose 0.5% in May, as expected.
On the other hand, consumer spending on a real basis slowed down, rising 0.2% in May compared to the previous +0.9%, below the expected consensus growth of +0.4%.
The slowdown in consumption spending and the weakening of core inflation bring investors to hope that the price fire has peaked, and that, consequently, interest rate hikes by the Fed may be less aggressive.
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