On inflation, PCE data for February rose in-line with expectations, further cutting into real disposable income, which was down another 0.2% in February. On a year-over-year basis, the PCE Price Index was up 6.4% while the core PCE Price Index, which excludes food and energy, was up 5.4% – its highest level since 1983.
- Personal income increased 0.5% month-over-month in February (Briefing.com consensus 0.5%), though real personal disposable income was down 0.2%. Personal spending increased 0.2% (Briefing.com consensus 0.5%) while the personal savings rate as a percentage of disposable income increased to 6.3% from a revised 6.1% (from 6.4%) in January. Real personal spending was down 0.4%. The PCE Price Index was up 0.6% (Briefing.com consensus 0.6%), pushing the year-over-year rate to 6.4% from 6.0%. The core PCE Price Index, which excludes food and energy, was up 0.4% (Briefing.com consensus 0.4%), pushing the year-over-year rate up to 5.4% from 5.2% in January.
- The key takeaway from the report is that inflation continues taking a bite out of wage gains, as real personal disposable income decreased 0.2% while the Core PCE Price Index rose to its highest level since 1983.
- Initial jobless claims for the week ending March 26, increased by 14,000 to 202,000 (Briefing.com consensus 200,000), rising off their lowest level since September 1969. Continuing jobless claims for the week ending March 19 decreased by 35,000 to 1.307 million, a level not seen since December 27, 1969.
- The key takeaway from the report is that with claims hovering at levels not seen since late 1969/early 1970, the labor market remains tight, which can serve as a tailwind to already-high inflation.
- The Chicago PMI for March increased to 62.9 (Briefing.com consensus 56.8) from 56.3 in February.