Another downside surprise for inflation. While the headline y/y rate moved up to 1.49%, core PCE was flat on the month which took the y/y rate back down to just 1.553%. That’s enough to round it up to 1.6% on the wires but it’s still the lowest print since Sep 2017.
Price data basically confirms what we knew, inflation is back in a moderating phase with dip in core highlighting that. Income a little below expectations but the underlying wage story remains constructive, so nothing to be concerned about. Although in terms of Fed priorities the pick-up in wage growth is not enough to offset broader demand concerns.
Despite positive noises on wages from both the Fed and the ECB there is little sign we’re returning to the…