In­crease in Core PCE Prices Slows to 1.8% vs. Year Ago

The Bond Buyer - - Market News -

Nom­i­nal per­sonal con­sump­tion ex­pen­di­tures rose 0.6% in Oc­to­ber, stronger than ex­pected, while core PCE prices were up 0.1% for the month, slow­ing the year/year rate to 1.8% af­ter round­ing, ac­cord­ing to data re­leased by the Bureau of Eco­nomic Anal­y­sis Thurs­day morn­ing.

The 1.8% year/year rate for core PCE prices, the low­est since March, follows down­ward re­vi­sions af­ter round­ing to the pre­vi­ous two months to 1.9%, and re­sults par­tially from base ef­fects due to a larger month/month rise a year ear­lier. The rate sits moder­ately be­low Fed’s in­fla­tion tar­get.

The 0.6% gain in cur­rent dol­lar PCE was above the 0.5% me­dian ex­pec­ta­tion in an MNI sur­vey and fol­lowed a 0.2% gain in Septem­ber. Spend­ing on durable goods was up 0.5% in the month, while non­durable goods spend­ing rose 0.6% on a 2.4% in­crease in en­ergy prices. Ser­vices spend­ing was up 0.7%.

Real PCE was up 0.4% in Oc­to­ber, as the over­all PCE price in­dex was up 0.2%. .

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