The Inflation in the United States It was 2.7% per year, according to the pricing index of personal consumption spending (PCEfor its acronym in English), The measurement favorite by the Federal Reserve (FED) to follow the evolution of prices. In addition, it was also known that Personal spending increased above what was expecteda sign that accounts for the level of consumption is maintained in the US economy.
The variation of prices at the interannual level of the PCE was in line with the estimated for the consensus of the analysts. In addition, it was a slight increase compared to July, when it was 2.6% year -on -year. In the monthly measurement a similar behavior was observed, with an increase of 0.3% compared to 0.2% of the previous month.
“In the interannual measurement, practically The totality of the variation of the PCE was explained again by serviceswhich contributed in 2.4 points. Also, in the monthly measurement services was the item that contributed the most to the variation with 0.21 points, “they explained from Balanz Research.
In the core measurement, also known underlying, A coincidence was observed both forecast by economists and against the previous month: 0.2% in the monthly and 2.9% year -on -year.
Good consumption data
For its part, The surprise came from the side of personal consumptionwhich represents more than two thirds of the economic activity of the United States: increased a monthly 0.6% in August, after an advance of 0.5% in July. The projections were waiting for 0.5%.
From Sailing Investments explained to Scope that “consumption in the United States He shows resilience again in Augustreinforcing the idea that the economy is still on solid land despite the slowdown in the labor market. “
And they deepened: “The progress was mainly driven by higher -income householdsfavored by a robust stock market and still high housing prices, while The lower resources sectors continue to feel the highest price pressure and cuts in food assistance programs. “
Fed: Does the feature continue?
“The PCE was in line with expectations”said Cooper Howard, director of Fixed Income Strategy at the Schwab Center for Financial Research in a report to its customers.
He added that “personal income, salaries and salaries increased, but not as much as the previous reading, which suggests some deceleration, but not a significant fall.” And he stressed that the PCE was also checked down the previous month, “What gives the green light to continue with its tendency to cut the rates this year“
In Sailing Inversiones they stated that “the report offers an unusual balance: a more vigorous consumption without an unexpected rebound in inflation“. It is a” combination that reduces the fear that The Fed must stop its cycle of rate cuts, although the persistence of prices remains a challenge“
Similarly, Greg Wilensky, American fixed income director of Janus Henderson, explained that “although the interannual figures of the PCE inflation are still moderately above the 2% target of the Federal Reserve, this last publication will do nothing to stop the strong expectation that the Fed cuts the rates again at its meeting on October 29”.
However, from Schwab they recalled that the good data of the US economy that met yesterday They are “delaying” the expectations of rate cuts and reducing the probability of two more cuts by 2025. Among them, the decrease in unemployment subsidies and an increase of GDP during the second quarter, well above the projected.
In this sense, the expectation of rate cut in 25 basic points for December went from 83% to 61% in just one week, according to the CME Fedwatch tool. In any case, the chances of a cut by the end of October are maintained around 85% among the operators of Wall Street.
Wilensky argued that “although other recent indicators of economic strength, including today’s spending data, have continued to surprise up, The Federal Reserve at the October meeting will continue to inclined towards the vision that the downward risks for its mandate of full employment are now the greatest concernunless they see convincing evidence otherwise. “
Source: Ambito
