‘SuperCore’ Inflation Rises For 49th Straight Month As Spending Disappoints

The last month has seen US Macro data collapsing at its fastest rate in years…

Source: Bloomberg

…which, many believe, will also drag down inflation (and it has been)…

Source: Bloomberg

Today, we get to see The Fed’s favorite inflation indicator – Core PCE – which rose 0.1% MoM in May (after a revised +0.3% MoM for April) and in line with expectations. The headline PCE Price Index was unchanged MoM as expected as Durable Goods deflation trumped surging Services costs…

Source: Bloomberg

On a YoY basis, both headline and core PCE declined…

Source: Bloomberg

On a YoY basis, Durable Goods deflation is at its strongest in at least a decade…

Source: Bloomberg

More notably, the so-called SuperCore PCE rose 0.1% MoM, which saw YoY slow to 3.39%… which is awkwardly stagnant at elevated levels…

Source: Bloomberg

That is the 49th straight monthly rise in SuperCore prices with Healthcare costs soaring…

Source: Bloomberg

On a MoM basis, Income grew more than expected (+0.5% vs +0.2% exp) while spending rose less than expected (+0.2% MoM vs +0.3% exp)

Source: Bloomberg

Which accelerated both income and spending on a YoY basis (with the latter outpacing the former, of course)…

Source: Bloomberg

With wage pressures rising once again…

• Government 8.5%, up from 8.4% but below the record high of 8.9%

• Private 4.5% up from 4.2%

 

Source: Bloomberg

And after a series of revisions, the savings rate ticked up to 3.9% of DPI (from 3.7%) – the highest since January…

Source: Bloomberg

All of which takes place against a background of the sixth straight month of rising government handouts (well it is an election year after all)…

Source: Bloomberg

Finally, while acyclical inflationary pressures continue to drift lower, cyclical inflationary pressures remain extremely elevated…

Source: Bloomberg

A very mixed bag but nothing screams ‘automatic’ rate-cuts… and SuperCore refuses to budge.