March Core PCE Price Index:
+0.3% M/M vs. +0.3% consensus and +0.3% prior.
+2.8% Y/Y vs. +2.7% consensus and +2.8% prior.
PCE Price Index: +0.3% M/M vs. +0.3% expected and +0.3% prior.
+2.7% Y/Y vs. +2.6% expected and +2.5% prior.
Personal income: +0.5% M/M vs. +0.5% expected and +0.3% prior.
Personal outlays: +0.8% M/M vs. +0.6% consensus and +0.8% prior.
The 10-year is down slightly to 4.67%
The weaker manufacturing sector is a much smaller part of the economy than services. Manufacturing PMI seems to suggest that economic growth and inflation are not as strong as feared – especially if payroll declines are true to this estimate at least. This is not a major surprise, but the weakness in the service index shows that services is seeing a spillover. This should be watched carefully.
The markets have reacted positively, following yesterday’s bounce back – up ¾ to 1%. (Bad news is good news!)
Tesla reports today, likely to be bad but may be discounted.
Meta reports tomorrow after the market, I’ll put up the preview numbers.
Microsoft and Google report on Thursday.
To round off the week we have the PCE number on Friday, which should give us a better idea of inflation – that is the Fed’s preferred gauge.
Fed’s preferred inflation gauge subsides, in line with consensus, in February
Core PCE Price Index, which excludes food and energy, rose 0.3% M/M in February vs. +0.3% consensus and 0.5% prior (revised from +0.4%).
On a year-over-year basis, core PCE increased 2.8% Y/Y, compared with the +2.8% consensus and +2.9% prior (revised from 2.8%).
Including food and energy prices, the PCE Price Index grew 0.3% M/M, less than the +0.4% expected and slowing from +0.4% in January (revised from +0.3%).
Prices for goods rose by 0.5%, bolstered by energy prices, and prices for services rose 0.3%. Food prices edged up 0.1%, while energy prices jumped 2.3% during the month.
2.5% Y/Y vs. +2.5% expected and +2.4% prior.
Personal income increased less than expected, up 0.3% M/M vs. +0.4% expected and +1.0% prior, the U.S. Commerce Department said on Friday.
Personal outlays climbed 0.8% M/M, exceeding the +0.5% expected and accelerating from +0.2% in January.
Real disposable income, which is adjusted for inflation, declined 0.1% M/M in February, while real personal consumption expenditures increased 0.4%.