US July PCE core inflation +0.3% m/m vs +0.3% expected

Highlights of the Fed's personal consumption expenditure report for July 2021

• PCE core MoM +0.3% vs +0.3% expected
• Prior MoM +0.4%
• Core PCE +3.6% y/y vs +3.6% expected
• Prior was 3.5% y/y (revised to +3.6%)
  
• Headline PCE 4.2% y/y vs +4.0% prior
  
• Deflator MoM +0.4% vs +0.5% prior
  
• Full report
  

Consumer spending and income for June:

• Personal income +1.1% vs +0.2% expected. Prior month  +0.1%
  
• Personal spending -0.1% vs +0.3% expected. Prior month +1.0%
  
• Real personal spending +0.3% vs +0.5% prior

The flat core y/y reading is a sign that prices are beginning to crest. The monthly rises of 0.3% in core and 0.4% in headline inflation are also decelerations, though still well-above a 2% pace.

Details:

• Goods +5.4% vs +5.2% prior
  
• Durable goods +7.0% vs +7.2% prior
  
• Services +3.5% vs +3.4% prior
  
• Energy +23.6% vs +24.2% prior
  
• Food +2.4% vs +0.9% prior

Food inflation rose 0.6% in July after a 0.8% bump in June

On the spending side, it fell 1.6% m/m on goods but rose 0.6% on services on the shift to in-person reopening.

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August 28, 2021 at 12:30AM
Adam Button
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