US April core PCE +3.1% y/y vs +2.9% expected

Highlights from the PCE report for April 2021:

US Core PCE yy
  • Prior was +1.8%
  •  PCE core MoM +0.7% vs +0.6% expected
  •  Prior MoM +0.4%
  •  Deflator YoY +3.6% vs +3.5% expected
  •  Prior deflator YoY +2.4%
  •  Deflator MoM +0.6% vs +0.6% expected
  •  Prior MoM deflator +0.5% (revised to +0.6%)
  • Full report

This is all a touch on the strong side but I think the market was braced or priced for something worse. The dollar has dipped on the data.

Consumers spending and income for April:

  • Personal income -13.1% vs -14.2% expected. Prior month +20.9%
  • Personal spending +0.5% vs +0.5% expected. Prior month +4.7%
  • Real personal spending -0.1% vs +0.2% expected. Prior month +4.6%

There were some upward revisions to March spending as the late-month stimulus checks came in. Spending held up into April but it’s it’s tough to separate stimulus money from the real economy and that will continue to be a challenge in the months ahead.

More details on inflation (y/y):

  • Goods +4.5%
  • Durable goods +5.2%
  • Services +3.1%
  • Energy +24.8%
  • Food +0.9%

The PCE report doesn’t offer the same level of detail as CPI so you can’t say how much of a factor things like the spike in car prices had.

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