pebblewriter

Tag: Personal Spending

  • PCE in Line, Home Sales Beat

    PCE increased 0.2% MoM and 2.6% YoY in December, in line with most estimates. Core PCE increased 2.9% YoY.  This is the smallest gain since Mar 2021. Drilling down, goods rose 1.1% (durable goods 1.5%) in December while services rose 0.3%.

    Real PCE rose 3.2% YoY, with the goods category growing 5% and durable goods rising 8.5%.

    At 0.7% MoM, personal spending rose substantially more than the 0.4% estimates (and prior.) Spending rose 4.2% YoY, a slight decrease from November’s 4.4%.

    December pending home sales far outpaced estimates at +8.3% versus 2.0% and -0.3% prior. The annual increase was much less frothy at 1.3%. The monthly beat was paced by 11.9% and 14.0% gains in the South and West respectively. Sales dropped 3.0% in the Northeast.

    Futures are off slightly after rebounding from their overnight lows.
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  • PCE On the Rise

    After falling for months, YoY PCE ticked higher in July: 3.3% versus 3.0% in June. Excluding food and energy, the print was 4.2% versus 4.1% in June.The data pared some of the overnight ramp, with futures easing lower as we approach the opening bell.

    In other economic news, personal spending (0.8% MoM) rose faster than expected while income (0.2% MoM) grew slower than expected – not an optimal combination when trying to avoid a recession.

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  • Some Like It Hot

    If you’re a retailer, you might be thrilled with the personal income and personal spending beat last month (0.4% vs 0.3% exp and 0.8% versus 0.4% expected.) If you’re a manufacturer, you might be pleased with durable goods coming in at a +1.1% versus the -1.3% expected.

    But, if you’re a member of the FOMC, you have to be chagrined that those hot numbers, combined with hotter core and headline PCE and tightening credit conditions, will force tighter monetary conditions.  The algos agreed for a few minutes, but were quickly reminded of the requirement to take their cues from VIX.

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