- March personal income and spending were both are set to increase 0.5% after a rise of 0.6% in February.
- Core personal consumption expenditures inflation, or core PCE inflation, was expected to tick 0.1% in March after a 0.3% increased the month before. This measure is a favorite of the Fed for determining inflation .
Personal income in March rose 0.7%, above the forecast. Wages have so far helped sustain spending. Disposable income (after taxes) increased 0.7% in March. Savings also improved.
The core PCE inflation was unchanged in March for the first time since November. This puts it at a 2.1% YOY rate, which is trending down. Total inflation, however, is 2.4%. The Fed's comfort zone is in the range of 1-2% rate of inflation, so if the declining trend continues, we might get to the top of the Fed's comfort range. This could ease some fears the U.S. economy is headed toward stagflation.
It seems the market is reacting favorably to the report as futures have ticked up following the data.
Before the bell: Stocks futures steady ahead of GDP, housing data
Google's plan for netbook PCs moves higher into the clouds
So long peak oil, here comes peak uranium
Reader Comments (Page 1 of 1)
4-30-2007 @ 9:47AM
jim said...
what a bunch of crap. anyone who pays the bills knows that inflation is on the rise. how about the price of gas, food and the things that the people use. all have gone up up up.
4-30-2007 @ 10:23AM
Melly said...
Jim, I feel your pain...
Core inflation, however, specifically excludes energy and food prices. So while total inflation is up to 2.4%, core may be trending down.
Economists have always argued which gauge is the correct one to use, so you're not alone thinking excluding energy and food prices is ridiculous.
4-30-2007 @ 10:37AM
JAN said...
I SUPPOSE THE THING WE NEED TO REMEMBER IS THE FORCES THAT BE WILL ALWAYS TRY TO MAKE THINGS SOUND BETTER THAN THEY REALLY ARE. IF THE FACTS WERE EVER TRUELY REPORTED THEN THEY KNOW PEOPLE WOULD PANIC AND CUT SPENDING WAY BACK. BUT WITH MOST OF THE POPULATION IN A "FOLLOW THE LEADER MENTALITY" FROM THEIR PERSPECTIVE, IF THE PROFESSIONALS SAY IT'S GETTING BETTER THEN "HEY,IT MUST BE" BECAUSE OF THIS MIND SET. THEY WILL CONTINUE TO MISLEAD THE PUBLIC, AND SADLY,, WE ARE LETTING THEM.