USA: While Americans’ income and spending is normally the headline-making data, this morning’s release will focus all eyes on The Fed’s favorite inflation indicator – the PCE Deflator.
The headline PCE Deflator rose 3.6% YoY, the fastest rate or price increases since 2008.
Even more notably, the Core PCE Deflator soared 3.1% YoY (hotter than the +2.9% YoY expected) and the hottest print since May 1992…
With the highest MoM rise in the core deflator since 9/11…
However, back in income and spending land, the picture was very mixed with incomes crashing 13.1% MoM and spending rising just 0.5% MoM after the stimmies run dry …
That is the biggest MoM crash in incomes ever which sent the savings rate plunging…
The consumer buffer is almost gone: personal savings rate plunges by 50% as Americans do what they do best: spend their savings.
So – let’s summarize – prices are rising at their fastest pace in almost 30 years and incomes just plunged by their most ever!
We’re gonna need more stimmies!
by Tyler Durden