Americans ramp up spending in February, prices roughly stable
By Alexander Bueso
Date: Friday 29 Mar 2024
(Sharecast News) - Americans ramped up their spending amid roughly stable price pressures.
According to the U.S. Department of Labor, personal incomes grew at a month-on-month pace of 0.3% in February.
Personal consumption expenditures on the other hand shot up by 0.8% versus January.
On the prices front, the headline PCE price deflator increased by 0.3% month-on-month, such that the annual rate of growth ticked up by a tenth of a percentage point to 2.5%, as expected by economists.
The annual rate of increase in core PCE prices on the other hand dipped from 2.9% to 2.8% (consensus: 2.9%).
However, the prior month's reading was was revised up by a tenth of a percentage point to 2.9%.
The personal saving rate declined from 4.1% during the previous month to 3.6%.
"We also learnt from the February PCE report that both the headline and core PCE deflator came in at 0.3% m/m last month. That is not the "continued good news" on inflation that we saw consistently in the second half of 2023" said Michael Pearce, deputy chief US economist at Oxford Economics.
"However, it is notably better than the January outturn and the details looked better, too. We still expect continued disinflation over the course of 2024 will enable the Fed to gradually loosen policy this year, though the stronger data makes delaying the decision to start cutting rates easier."
-- More to follow --
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