- Core PCE inflation ended up being very much as analysts expected in June, at 0.18% M/M (detailed post-CPI and PPI estimates had averaged around 0.17%).
- Instead, yesterday’s upside surprise for Q2 was primarily concentrated in May. It meant that what was at the time a surprisingly soft 0.08% M/M was revised up to a still favorable 0.13% M/M (i.e. easily below the rate consistent with 2% annualized inflation).
- The rough trend of disinflation after a particularly strong Q1 still holds: Q2 averaged 0.19% M/M (including 0.26 in April) after an average 0.37% in Q1. It’s still above the particularly soft 0.13% through Q4 but on a par with 0.18% in Q3.
- The three-month slows to 2.3% annualized but the six-month still sees stickiness at 3.4% annualized thanks to the last month of it capturing January’s 0.51. Whilst this should mechanically drop lower in July, it’s nevertheless a fifth month in excess of the Y/Y rate.
- This six-month rate will come increasingly into prominence when it comes to assessing latest trends later this year as the Y/Y starts to be biased higher on base effects.
- Supercore PCE inflation (non-housing core services) helped drive this latest monthly profile, with 0.19% M/M in June after an upward revised 0.18% (initial 0.10) in May, both still progress from 0.29% in Apr and an average 0.45% in Q1.
- Latest supercore trend rates: three-month slows from 3.6% to 2.6%, six-month steady at 4.1% and the Y/Y eases marginally from 3.48% to 3.43%.
- In all, the overall figures confirm what’s thought to have been two months of renewed inflationary progress but it does follow that particularly strong and sustained start to the year.
US DATA: Core PCE Upward Revision Lands On An Already Weak May
Last updated at:Jul-26 12:56By: Chris Harrison
- Core PCE inflation ended up being very much as analysts expected in June, at 0.18% M/M (detailed post-CPI and PPI estimates had averaged around 0.17%).
- Instead, yesterday’s upside surprise for Q2 was primarily concentrated in May. It meant that what was at the time a surprisingly soft 0.08% M/M was revised up to a still favorable 0.13% M/M (i.e. easily below the rate consistent with 2% annualized inflation).
- The rough trend of disinflation after a particularly strong Q1 still holds: Q2 averaged 0.19% M/M (including 0.26 in April) after an average 0.37% in Q1. It’s still above the particularly soft 0.13% through Q4 but on a par with 0.18% in Q3.
- The three-month slows to 2.3% annualized but the six-month still sees stickiness at 3.4% annualized thanks to the last month of it capturing January’s 0.51. Whilst this should mechanically drop lower in July, it’s nevertheless a fifth month in excess of the Y/Y rate.
- This six-month rate will come increasingly into prominence when it comes to assessing latest trends later this year as the Y/Y starts to be biased higher on base effects.
- Supercore PCE inflation (non-housing core services) helped drive this latest monthly profile, with 0.19% M/M in June after an upward revised 0.18% (initial 0.10) in May, both still progress from 0.29% in Apr and an average 0.45% in Q1.
- Latest supercore trend rates: three-month slows from 3.6% to 2.6%, six-month steady at 4.1% and the Y/Y eases marginally from 3.48% to 3.43%.
- In all, the overall figures confirm what’s thought to have been two months of renewed inflationary progress but it does follow that particularly strong and sustained start to the year.
