US monthly data pack for May, including PCE inflation data, was released today at 1:30 pm BST. Report was expected to show a slowdown in headline and core PCE measures, as well as acceleration in personal income and spending growth. However, it should be said that while PCE is Fed's preferred inflation measure, it is released with a lag compared to CPI data and therefore may not have as much as impact on the markets.
Actual data turned out to be mostly in-line with expectations - headline and core CPI slowed to 2.6% YoY, just as market expected, with monthly changes also matching estimates. Some surprise was offered in personal income and spending data, with the former growing more than expected and the latter growing less than expected. Overall, data should not have too much impact on Fed's policy view.
Market's reaction was dovish at first with USD moving lower in a knee-jerk move and equities moving higher. However, gains on indices were already erased, while declines on USD market were trimmed.
US, data pack for May
- Headline PCE (annual): 2.6% YoY vs 2.6% YoY expected (2.7% YoY previously)
- Headline PCE (monthly): 0.0% MoM vs 0.0% MoM expected (0.3% MoM previously)
- Core PCE (annual): 2.6% YoY vs 2.6% YoY expected (2.8% YoY previously)
- Core PCE (monthly): 0.1% MoM vs 0.1% MoM expected (0.2% MoM previously)
- Personal income: 0.5% MoM vs 0.4% MoM expected (0.3% MoM previously)
- Personal spending: 0.2% MoM vs 0.3% MoM expected (0.2% MoM previously)
Source: xStation5
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