HEADLINE/CORE PCE - Inflation dips down into to historical norms
U.S. Headline PCE - Lower than Expected ✅
Actual: 2.64%
Exp: 2.8%
Prev: 3.0%
US Core PCE - Lower than Expected ✅
Actual: 3.16%
Exp: 3.4%
Prev: 3.5%
As highlighted on my recent Macro Monday post Core PCE is the Feds favorite metric for measuring inflation (as it excludes volatile price swings from the likes of energy and food and gives a good indication of the underlying inflation trend). PCE is also considered more comprehensive and a more consumer led report than CPI which focuses more on a lessor altered fixed basket of goods (compared month to month).
CORE PCE
Core PCE has come in this month lower than expected at 3.16% (expected 3.4%). This is great news for the fight against inflation.
HEADLINE PCE
Separately, Headline PCE has just dipped under the 3% level down to 2.64% which is getting very close to the Federal Reserves long term target of 2%.
Historical Core PCE Norms
On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart). We are slowly getting back down into this more historically moderate level. A sub 3% Core PCE next month would be ideal and demonstrate further easing of inflationary pressures.
For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review this weeks Macro Monday released earlier this week.
PUKA
Actual: 2.64%
Exp: 2.8%
Prev: 3.0%
US Core PCE - Lower than Expected ✅
Actual: 3.16%
Exp: 3.4%
Prev: 3.5%
As highlighted on my recent Macro Monday post Core PCE is the Feds favorite metric for measuring inflation (as it excludes volatile price swings from the likes of energy and food and gives a good indication of the underlying inflation trend). PCE is also considered more comprehensive and a more consumer led report than CPI which focuses more on a lessor altered fixed basket of goods (compared month to month).
CORE PCE
Core PCE has come in this month lower than expected at 3.16% (expected 3.4%). This is great news for the fight against inflation.
HEADLINE PCE
Separately, Headline PCE has just dipped under the 3% level down to 2.64% which is getting very close to the Federal Reserves long term target of 2%.
Historical Core PCE Norms
On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart). We are slowly getting back down into this more historically moderate level. A sub 3% Core PCE next month would be ideal and demonstrate further easing of inflationary pressures.
For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review this weeks Macro Monday released earlier this week.
PUKA
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