Fed's Preferred Inflation Indicator Reaches Highest Level Since April
The Federal Reserve's preferred inflation indicator, Core PCE, has risen less than anticipated on a month-on-month basis, with an increase of 0.1% compared to the expected 0.2%. However, on a year-on-year basis, Core PCE has risen from 2.6% to 2.7%, which aligns with expectations. This is the highest it has been since April.
Headline PCE Dips to Lowest Level Since March 2021
The headline PCE has dropped to +2.2% YoY, which is the lowest it has been since March 2021.
Income and Spending Increase Less Than Expected in August
Both income and spending have increased less than expected in August, with income experiencing the smallest month-on-month rise since July 2023 and spending reaching its equal lowest since January 2024.
YoY Growth in Spending and Income Slows Down
On a year-on-year basis, growth in both spending and income has slowed down.
Government Handouts Continue to Soar
If the government wasn't handing out billions to the people, things could be much worse. As it stands, the consumer is now wiped out, and key inflation measures are refusing to drop significantly. As a result, the Federal Reserve will continue to cut, especially given that it's an election year. This could potentially lead to the second coming of the Arthur Burns hyperinflation Fed.
Bottom Line
The current economic situation presents a complex picture, with the Federal Reserve's preferred inflation indicator reaching its highest level since April, while income and spending growth slows down. Meanwhile, government handouts continue to soar, potentially averting an even more dire situation. What are your thoughts on these developments? Do you think the Fed's actions will lead to a second coming of the Arthur Burns hyperinflation Fed? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.
