Fed's Favorite Inflation Indicator At 30-Year-High As Savings Rate Plunges To Pre-COVID Levels

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by Tyler Durden
Wednesday, Nov 24, 2021 - 03:08 PM

Despite sentiment slumping and buying attitudes crashing, retail sales outperformed this month (thanks to inflation driving nominal prices higher) and analysts expected spending to surge faster than incomes once again and they did with incomes rising 0.5% MoM (+0.2% MoM exp) and spending jumping 1.3% MoM (+1.0% MoM exp).

Source: Bloomberg

Purchases of goods and services, unadjusted for changes in prices, increased 1.3% following a 0.6% gain in September, Commerce Department figures showed Wednesday.

On the income side, Private worker wages rise to match all time high at 8.4% Y/Y, Government worker wages drop to 11.0%, the lowest since March 2021

All of which means the Personal Savings Rate tumbled back to pre-COVID levels: 7.3% in Oct. was 7.6% in Jan...

Finally, and perhaps most importantly, The Fed's favorite inflation indicator - Core PCE Deflator - which jumped to its highest since 1991 (and headline PCE rose 5.0% YoY)...

Source: Bloomberg

Get back to work Mr.Powell!