Core PCE is headed in the right direction
  • Prior was +3.7%
  • PCE core m/m +0.2% vs +0.2% expected
  • Prior core m/m +0.3%
  • Headline PCE +3.0% vs +3.0% y/y expected (prior +3.4%)
  • Deflator m/m +0.0% vs +0.1% expected (prior +0.4%)

Consumer spending and income for October:

  • Personal income +0.2% vs +0.2% expected. Prior month +0.3%
  • Personal spending +0.2% vs +0.2% expected. Prior month +0.7%
  • Real personal spending +0.2% vs +0.4% prior

There are no big surprises here but it's clear that inflation and core inflation are headed in the right direction. Indications from November have been promising as well and the market has largely moved past worrying about inflation. The US dollar is a bit stronger following this report and initial jobless claims.