Reporter of the Economic Business: Zhang Lingxiao Reporter of the Economic Business Business: Gao Han
On June 30, local time, the core personal consumption expenditure (PCE) price index of the United States after excluding the volatile food and energy prices in May rose by 4.7% year-on-year, the lowest since November last year, better than the previous market expectations of 4.8%. At the same time, this is also the third consecutive month of decline in this data. In May, the core PCE price index of rose 0.3% month-on-month, the same as last month.
In May, the overall PCE price index, including food and energy prices, rose 6.3% year-on-year, the same as April data. On a month-on-month basis, the data in May increased by 0.6%, which was lower than the market expected 0.7%, but increased from 0.2% in April. After the data of
was released, the three major stock indexes of , , , , , , , , collectively fell. As of press time, the Dow Jones Industrial Average fell 1.62%, to 30,525.68 points; the , S&P 500, , 1.86%, to 3,747.93 points; the Nasdaq fell 2.60%, to 10,886.90 points.
Image source: Futuniu Niu
Core PCE price index is the inflation indicator that the Federal Reserve Feder pays the most attention to, and the changes in this indicator directly affect the Federal Reserve's decision-making. Judging from the latest data, inflation has shown a trend of cooling down, but the value is still at a high level similar to that in the 1980s. The data released by
also includes data on personal income and expenditure in the United States. In May, personal income in the United States increased by 0.5% month-on-month, consistent with last month. However, in terms of spending, the data has declined. In May, personal consumption expenditure in the United States increased by 0.2% month-on-month, while in April it was 0.6%. This is the first time since December last year that expenditure growth has been lower than revenue growth. After inflation adjustment, spending in May actually fell by 0.4% month-on-month, the first drop this year.
Consumer spending is one of the main driving forces of the US economy. Its low growth means that consumers are facing high inflation and rising interest rates, cutting non-essential spending, demand is starting to show signs of weakening, and the economy may be slowing down.
Since the Fed continued to toughen rate hikes , the market has been worried about whether the Fed will suppress demand in the fight against inflation, resulting in an economic recession.
The U.S. consumer confidence index released last week was at an all-time low, which is enough to show that consumer concerns about the recession are intensifying. Although the labor market is strong, it also shows some early signs of weakness. According to newly released data, the number of initial unemployment claims (10,000) in the week ended June 25 was 23.1, higher than the market's generally expected 22.8.
At the ECB's annual monetary policy forum held on Wednesday local time, Federal Reserve Chairman Powell still insisted that although there is "does" the risk of the Federal Reserve's tightening of policies that caused the economy to slow down, the biggest mistake is the failure to restore price stability. Powell believes that the U.S. economy is strong enough, with households and businesses financially stable, and an economic recession should be avoided.
But at the same time, Powell also admitted that in recent months, in the context of the Russian-Ukrainian conflict, the task of avoiding the economic recession has become more challenging.
He said the Fed hopes to slow down U.S. economic growth to a level that is enough to reduce inflation but does not lead to recession.
As of press time, the CME Group's "FedWatch" tool shows that the futures market believes that the probability that the Fed will raise interest rates by 75 basis points next month is currently about 80%.
Daily Economic News
Daily Economic News
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