{"id":197345,"date":"2024-08-30T10:00:00","date_gmt":"2024-08-30T14:00:00","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/uncategorized\/feds-preferred-inflation-gauge-falls-short-of-expectations-in-july-personal-spending-accelerates\/"},"modified":"2024-09-02T08:37:17","modified_gmt":"2024-09-02T08:37:17","slug":"feds-preferred-inflation-gauge-falls-short-of-expectations-in-july-personal-spending-accelerates","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/securities\/macro\/feds-preferred-inflation-gauge-falls-short-of-expectations-in-july-personal-spending-accelerates\/","title":{"rendered":"Fed&#8217;s Preferred Inflation Gauge Falls Short Of Expectations In July, Personal Spending Accelerates"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">ZINGER KEY POINTS<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Annual PCE inflation held steady at 2.5% in July, slightly below the forecasted 2.6%.<\/li>\n\n\n\n<li>Core PCE inflation grew 2.6% year-over-year, unchanged from June but also below expectations.<\/li>\n<\/ul>\n\n\n\n<p>After three consecutive months of decline, the Federal Reserve\u2019s preferred measure of inflation held steady in July, although it came in<a href=\"https:\/\/www.benzinga.com\/analyst-ratings\/analyst-color\/24\/08\/40624107\/traders-brace-for-feds-favorite-inflation-report-friday-july-price-pressures-expect\" target=\"_blank\" rel=\"noreferrer noopener\">&nbsp;slightly below market forecasts.<\/a><\/p>\n\n\n\n<p>The Personal Consumption Expenditures (PCE) Price Index increased by 2.5% in July 2024 compared to the same period last year, according to government data released Friday.<\/p>\n\n\n\n<p>Alongside this inflation data, both personal spending and spending accelerated on a monthly basis, highlighting strong financial health among U.S. households.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Personal Income And Outlays, July 2024: Key Highlights<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Annual PCE Inflation<\/strong>: The PCE price index remained unchanged at 2.5% year-over-year in July, matching June\u2019s figure and falling just short of the anticipated 2.6%, as tracked by TradingEconomics.<\/li>\n\n\n\n<li><strong>Monthly PCE Inflation<\/strong>: The consumer basket rose by 0.2% from the previous month, an increase from June\u2019s 0.1% pace, aligning with market expectations.<\/li>\n\n\n\n<li><strong>Core PCE Inflation<\/strong>: Excluding volatile food and energy prices, the core PCE price index grew by 2.6% year-over-year in July, the same as in June, but slightly below the forecasted 2.7%.<\/li>\n\n\n\n<li><strong>Monthly Core PCE Inflation<\/strong>: The core PCE price index also rose by 0.2% on a monthly basis, consistent with both market expectations and the previous pace.<\/li>\n\n\n\n<li><strong>Personal Spending<\/strong>: Personal spending increased by 0.5% in July compared to the previous month, significantly outpacing June\u2019s 0.2% rise and matching expectations of a 0.5% increase.<\/li>\n\n\n\n<li><strong>Personal Income<\/strong>: Personal income grew by $75.1 billion, or 0.3% month-over-month in July, up by 0.1 percentage points compared to both the previous month&#8217;s growth and market expectations.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Market Reactions<\/h3>\n\n\n\n<p>The lower-than-expected July PCE report further strengthens the already high expectations that the Federal Reserve will cut interest rates in September.<\/p>\n\n\n\n<p>Yet, the stronger-than-expected surge in both personal spending and personal income indicate robust consumer health, supporting ongoing economic growth and thus trimming hopes for large and aggressive rate cuts.<\/p>\n\n\n\n<p>Market-implied probabilities on a 50-basis-point rate in September eased from 32% to 30% as per CME FedWatch.<\/p>\n\n\n\n<p>The U.S dollar index<strong>\u00a0<\/strong>rose 0.2% after the release.<\/p>\n\n\n\n<p>Futures on major U.S. equity indices soared in the premarket trading Friday. Contracts on the S&amp;P 500 were 0.4% higher, while those on the tech-heavy Nasdaq 100 rose 0.7%.<\/p>\n\n\n\n<p>On Thursday, the Dow Jones index hit fresh record highs.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted August 30, 2024 &#8211; <a href=\"https:\/\/www.benzinga.com\/economics\/macro-economic-events\/24\/08\/40650834\/feds-preferred-inflation-gauge-falls-short-of-expectations-in-july-personal-spend\">Fed&#8217;s Preferred Inflation Gauge Falls Short Of Expectations In July, Personal Spending Accelerates<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After three consecutive months of decline, the Federal Reserve\u2019s preferred measure of inflation held steady in July, although it came in slightly below market forecasts.<\/p>\n","protected":false},"author":1128,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[146,147,8,12,148,7],"tags":[],"contributors-categories":[407],"class_list":{"0":"post-197345","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Fed&#8217;s Preferred Inflation Gauge Falls Short Of Expectations In July, Personal Spending Accelerates<\/title>\n<meta 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