• First reading was 2.0%
  • Consumption 1.4% vs 1.9% exp
  • Core PCE inflation +1.1% q/q vs 1.3% exp

Consumption revised down heavily from 2.0%, which is a worry. Looking close, spending on durables was up 8.7% in the quarter, which could be a sign of better things to come. Inventories and trade accounted for most of the upward revision.

The most negative part is the drop in business investment, which fell 2.2%, worse than the 1.3% expected. The bulls are hoping that investment was simply delayed because of the fiscal cliff.