Prior Prior Revised Consensus Actual
Personal Income - M/M change 0.4 % 0.3 % 0.3 % 0.2 %
Consumer Spending - M/M change 0.1 % 0.0 % 0.1 % 0.0 %
PCE Price Index -- M/M change 0.1 % -0.1 % -0.2 %
Core PCE price index - M/M change 0.2 % 0.0 % -0.1 %
PCE Price Index -- Y/Y change 2.1 % 1.8 % 1.8 %
Core PCE price index - Yr/Yr change 1.8 % 1.7 % 1.6 %
Based on the consumer and based on inflation, FOMC members won't be feeling much pressure to raise rates at least not any time soon. Consumer spending was unchanged in March, even weaker than Econoday's 0.1 percent consensus. More startling is the weakest showing in 16-1/2 years for core PCE prices which fell 0.1 percent to take down the year-on-year rate by a sizable 2 tenths to 1.6 percent.
Income is also disappointing, up only 0.2 percent with the wages & salaries component posting a very weak 0.1 percent rise. Consumers nevertheless managed to move money into the bank as the savings rate rose 2 tenths to 5.9 percent (which is another factor behind the weak spending).
The core PCE index is the key inflation gauge for the FOMC and prior to this report members were expressing confidence that it was stable and generally headed toward their 2 percent target. And overall prices which moved above target in February are now back below target, falling a monthly 0.2 percent with the year-on-year rate down a steep 3 tenths to 1.8 percent. First-quarter economic data proved surprisingly weak even by first-quarter standards. The economy has catching up to do.
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