As energy prices continue to fall, the growth rate of the US PCE and core PCE price index slowed down in July, and the claim that inflation peaked was further consolidated.
However, in the case where inflation is still at a historical high in 40 years, this may not change the path of the Federal Reserve's continued aggressive hike rate . The growth rate of
PCE and core PCE price indexes both slowed down
On Friday, August 26, data from the US Department of Commerce showed that the US PCE price index in July increased by 6.3% year-on-year, lower than the market expectations of 6.4%, and the previous value was 6.8%. The year-on-year growth rate of is still at a historical high in nearly 40 years. in July fell 0.1% month-on-month, lower than the expected 0%, and the previous value was 1%. The month-on-month growth rate of is the first decline since April 2020.
Core PCE Price Index (excluding food and energy prices) - The inflation indicator that the Federal Reserve is most concerned about increased by 4.6% year-on-year in July, lower than the market expectations of 4.7%, and the previous value is 4.8%. is the smallest increase since October last year. It grew by 0.1% month-on-month, lower than the expected 0.2%, and the previous value is 0.6%.
Energy prices fell as the main reason for the slowdown in July price growth. Specifically, compared with June, the commodity price in July fell by 0.4% and the service price rose by 0.1%. Food prices rose 1.3%, while energy prices fell 4.8%.
Compared with the same period last year, commodity prices rose by 9.5% in July and service prices rose by 4.6%. Food prices rose 11.9% and energy prices rose 34.4%.
Labor costs rise
Personal income and expenditure continue to increase. In July, personal income in the United States increased by 0.2% month-on-month, expected to be 0.6%, the previous value was 0.6% (revised to 0.7%), the lowest level since January this year; personal consumption expenditure increased by 0.1% month-on-month, expected to be 0.5%, and the previous value was 1.1%. After inflation adjustment, actual personal spending in July increased by 0.2% month-on-month, expected to be 0.4%, and the previous value was 0.1% (revised down to 0%), the lowest level since December last year.
In the press release, the increase in personal income in July was mainly due to the increase in wages, compared with the decline in owners’ income, personal rental income and personal frequent transfer income. However, private sector and government wage growth slowed to varying degrees in July.
Specifically:
Private sector employee wages increased by 11.0% year-on-year in July, lower than the previous value of 11.4%, the lowest level since March 2021.
html In July, the wages of government departments increased by 4.1% year-on-year, lower than the previous value of 5.0%, the lowest level since March 2021.
7 personal consumption expenditure increased mainly because of the increase in service expenditure by US$33.3 billion and the decrease in commodity expenditure by US$9.6 billion. The biggest contributions to the decline in service spending are housing and utilities (mainly housing), international travel, etc. The decline in commodity spending is mainly due to the decrease in energy consumption such as gasoline.
Although both income and expenditure have increased, the high cost of living is emptiing Americans' wallets. Data showed that the savings rate in July was 5.0%, lower than the previous value of 5.1% (revised to 5.0%), the lowest level in 2009. After the data of
was released, the decline in USD index continued to expand, and is now at 107.93.
U.S. stock futures rose slightly, S&P 500 index futures rose nearly 0.4%, and Nasdaq futures rose 0.3%.
Federal Chairman Powell will speak to the economic outlook at Jackson Hole's annual meeting of the global central bank tonight (22:00 Beijing time on Friday).
analysis generally expects Powell to reiterate his determination to continue tightening monetary policy to show his determination to fight inflation. As economic uncertainty increases, he may suggest a slowdown in rate hikes, but will not stop or even turn in 2023.
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