Dollar Drops As Fed's Favorite Inflation Indicator Disappoints

Americans spending outpaced their income for the 5th month in a row (after massive revisions), and thanks to those revisions, spending is up even greater than we were told previously...

After revisions, spending growth is its highest since Oct 2014...

 

Both spending and income growth MoM printed as expected +0.4% MoM, but May spending was revised from +0.2% MoM to +0.5% MoM...

Real personal spending missed expectations, rising just 0.3% MoM vs expectation sof a 0.4% rise (but May was revised notably higher).

Income growth was relatively stable (after revisions)...

As the Employment Cost Index rose by 2.8% YoY in Q2 - the highest since Q3 2008...

Leaving the savings rate hovering at a 'healthy' 6.8%...

Thanks to the magic of upward revisions...

But, most interesting is the miss on Core PCE growth, rising 1.9% YoY (below expectations of a 2.0% YoY gain), the same growth as in May...

While we highly doubt this will do anything to shift Powell from his path of "1 hike/quarter until the world implodes", it has sparked some dollar weakness.

Comments

Last of the Mi… Tue, 07/31/2018 - 08:49 Permalink

The Fed's inflation indicator is the "speedometer" telling how fast the plebes are paying back their individual portion of QE. 

Ten years and trillions over the last 10 years, you can bet your ass the managed inflation is coming. There's a shit ton of debt to cover. 

BorisW Tue, 07/31/2018 - 08:50 Permalink

It's called clear the gaming table of money by the house. This sham of an economic system is designed to periodically operate this way.

Chief Joesph Tue, 07/31/2018 - 09:10 Permalink

Here is what John Williams of Shadowstats says about this:

• GDP Benchmark Revisions Showed the Economic Collapse into 2009 to be Shallower, With the Recovery and Expansion Somewhat Faster and Stronger

• A Number of Pre-Announced Gimmicks, and Redefinitions Helped to Mute Slowing Growth, Such as “Seasonally Adjusting” Seasonal Adjustments

• Underlying Downside Benchmark Revisions to Series Such as Industrial Production Had Limited Effect, Although Revised Trade Data Had Visible Impact

• Second-Quarter 2018 Annualized Real GDP Growth Boomed by 4.06%, Versus a Revised 2.22% (Previously 1.99%) in First-Quarter 2018, a Revised 2.29% (Previously 2.89%) in Fourth-Quarter 2017 and a Revised 2.82% (Previously 3.16%) in Third-Quarter 2017

• Nothing Like Avoiding a Downside Revision to Headline First-Quarter Activity by Lowering Growth in the Preceding Periods • Second-Quarter 2018 Real GDP Stood at 17.4% Above Its Pre-Recession Peak

• Yet, No Major Underlying Economic Series or Broad Employment Measure Comes Close to Confirming Such Growth in this Most-Heavily Gimmicked of U.S. Statistics