Highlights of the August 2019 US PCE report
- Prior personal spending +0.6% (revised to +0.5%)
- Real personal spending +0.1% vs +0.2% (prior +0.4%, revised to +0.3%))
- Personal income +0.4% vs +0.4% expected (prior +0.1%)
Inflation:
- PCE deflator 0.0 % m/m vs +0.1% expected
- PCE deflator 1.4% y/y vs +1.4% expected
- Core PCE +0.1% m/m vs +0.2% expected
- Core PCE 1.8% y/y vs +1.8% expected
Consumer spending has been doing all the heavy lifting in the US economy this year year but the August numbers showed a modest slowdown. Motor vehicle spending was solid but spending at restaurants and hotels dragged.
On the inflation side, lower food prices pulled down headline inflation to a rate of 1.4% from 1.7% y/y. Fuel prices were also lower in the month but that will reverse with the jump in oil this month.
Core PCE at 1.8% is the highest since January and is creeping closer to the Fed's 2% target.
