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Key Fed inflation measure rose 2.8% in March from a year ago, more than expected
Last edited Fri Apr 26, 2024, 12:08 PM - Edit history (1)
Source: CNBC
Published Fri, Apr 26 2024 8:31 AM EDT Updated 2 Hours Ago
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared with the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage points on the session. Futures traders grew slightly more optimistic about two potential rate cuts this year, raising the probability to 44%, according to the CME Group’s FedWatch gauge.
Read more: https://www.cnbc.com/2024/04/26/pce-inflation-march-2024-key-fed-inflation-measure-rose-2point8percent.html
Article updated.
Previous articles -
Published Fri, Apr 26 2024 8:31 AM EDT Updated 12 Min Ago
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session. Futures traders grew slightly more optimistic about two potential rate cuts this year, raising the probability to 44%, according to the CME Group's FedWatch gauge.
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session. Futures traders grew slightly more optimistic about two potential rate cuts this year, raising the probability to 44%, according to the CME Group's FedWatch gauge.
Published Fri, Apr 26 2024 8:31 AM EDT Updated 2 Min Ago
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated. The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session.
Consumers showed they are still spending despite the elevated price level. Personal spending rose 0.8% on the month, a touch higher even than the 0.7% estimate. Personal income increased 0.5%, in line with expectations and higher than the 0.3% increase in February.
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated. The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from February.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session.
Consumers showed they are still spending despite the elevated price level. Personal spending rose 0.8% on the month, a touch higher even than the 0.7% estimate. Personal income increased 0.5%, in line with expectations and higher than the 0.3% increase in February.
Published Fri, Apr 26 2024 8:31 AM EDT Updated 2 Min Ago
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session.
This is breaking news. Please check back here for updates.
Inflation showed little signs of letting up in March, with a key barometer the Federal Reserve watches closely showing that price pressures remain elevated.
The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in February, the Commerce Department reported Friday. That was above the 2.7% estimate from the Dow Jones consensus.
Including food and energy, the all-items PCE price gauge increased 2.7%, compared to the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected.
Markets showed little reaction to the data, with Wall Street poised to open higher. Treasury yields fell, with the benchmark 10-year note at 4.67%, down about 0.4 percentage point on the session.
This is breaking news. Please check back here for updates.
Original article -
Published Fri, Apr 26 20248:31 AM EDT
The core personal consumption expenditures price index was expected to increase 2.7% from a year ago in March, according to the Dow Jones consensus estimate.
This is breaking news. Please check back here for updates.
The core personal consumption expenditures price index was expected to increase 2.7% from a year ago in March, according to the Dow Jones consensus estimate.
This is breaking news. Please check back here for updates.
10 replies
= new reply since forum marked as read
= new reply since forum marked as read
I've been seeing some mischaracterizations of the recent inflation situation in the media, so here is a summary table followed by the graphs.
I annualize them all to be easy to compare to each other, and to compare to the FED's 2% goal. I use the actual index values rather than the one-digit changes that are commonly reported in the media. Links to the data are with the graphs.
The "1 month" number is the change from February to March, expressed as an annualized number.
"Regular" is the "headline" number that has "everything"
"Core" is the regular with food and energy removed (The Fed prefers this as a basis for projecting FUTURE inflation)
4/26/24 PCE (Fed's favorite inflation measure)
REGULAR 3 month: 4.4%, REGULAR 1 month: 3.9%; CORE 3 month: 4.4%, Core 1 month: 3.9%;
4/10/24 CPI-Consumer(retail) inflation
REGULAR 3 month: 4.6%, REGULAR 1 month: 4.6%; CORE 3 month: 4.5%, Core 1 month: 4.4%;
4/11/24 PPI (Wholesale prices)
REGULAR 3 month: 4.4%, REGULAR 1 month: 1.9%; CORE 3 month: 4.7%, Core 1 month: 2.5%;
. Average real (i.e. inflation-adjusted) hourly earnings are up over the past 2 years and are above the pre-pandemic level:
. . . # Real average hourly earnings of production and non-supervisory workers: https://data.bls.gov/timeseries/CES0500000032
. . . # Real average hourly earnings of private sector workers: https://data.bls.gov/timeseries/CES0500000013
And now the graphs, in the following order:
* Core PCE and Regular PCE (Core PCE is the Fed's favorite for projecting FUTURE inflation)
* Core CPI and Regular CPI
* Wholesale inflation - Core PPI and Regular PPI
CORE PCE through March that came out 4/26/24
CORE PCE: https://fred.stlouisfed.org/series/PCEPILFE
This is the one that the Fed weighs most heavily. The Fed weigh the PCE more heavily than the CPI. And in both cases, they weigh the CORE measures higher than the regular headline measures for projecting FUTURE inflation
Regular PCE through March that came out 4/26/24
PCE: https://fred.stlouisfed.org/series/PCEPI
CORE CPI through March that came out 4/10/24
http://data.bls.gov/timeseries/CUSR0000SA0L1E
The Regular aka Headline CPI through March that came out 4/10/24
https://data.bls.gov/timeseries/CUSR0000SA0
WHOLESALE INFLATION (PPI - the Producer Price Index)
https://www.bls.gov/news.release/ppi.nr0.htm
As for which core PPI measure, since the BLS highlights the one below in its reporting (as opposed to the one without food and energy), then I guess I should do likewise.
CORE PPI (excluding food, energy, trade services) through March that came out 4/11/24: http://data.bls.gov/timeseries/WPSFD49116
===========================================================
Regular PPI through March that came out 4/11/24 ( includes "everything" ): http://data.bls.gov/timeseries/WPSFD4
Last edited Sat Apr 27, 2024, 10:08 AM - Edit history (1)
You can show as many charts as you want but to everyone I know this is *just* shy of a disaster. Anyone who doesn't think this is a *SHIT* economy has NOT had to put gas in their work truck or buy groceries for a family for awhile. ... Someone can print a billion charts and it doesn't mean anything when I'm looking at $5.49 gas and paying $200 for what used to cost $80 and shivering in the dark while still paying $500 a month to PG&E.
... Nice happy looking charts, statistics, and cheery words for ideologs. Nothing to do with the reality here in California.
... Nice happy looking charts, statistics, and cheery words for ideologs. Nothing to do with the reality here in California.
Actually we had some of this discussion before - back on April 10 when I had the audacity to post the then-latest inflation graphs
https://www.democraticunderground.com/10143223421#post19 ff
Great info, by the way.
That was then and now is now I guess.
To which I replied in part, "I hate inflation too -- I was a young adult in the late 70's early 80's great inflation and it was downright scary. We never knew what would happen next."
I also mentioned this in number 18 of that thread (to another poster):
"My bond funds have been slaughtered (down 22% in purchasing power) as well as the purchasing power of my annuity, Sigh, looking at last 3 years. So I'm dismayed that interest rates are likely to be higher for longer than people were thinking a month or two ago (which will keep bond prices from recovering)"
This was from a study I did looking at the 3 years to April 9. In the 3-year period, prices rose 17.9% and consequently one's assets had to grow by the same amount just to have the same purchasing power. The bond fund I studied as a representative sample declined in nominal dollars, which worked out to a loss of purchasing power of 22%.
Rising inflation causes bond values in nominal dollars to decline. And in inflation-adjusted dollars, i.e. in purchasing power, to decline even more.
I know this is a "first world" problem. As is the 23% decline in the purchasing power of the income from my annuity in the 7 years I've had it (so that instead of being able to purchase 100 baskets of goods and services, I can only purchase 77 now).
But as "first world" as it may be, it boils down to whether or not I will outlive my savings.
So no, I'm not giddy bubbly-boo about inflation.
The key thing, unfortunately, is that prices are still rising and the damage accumulates.
I'm truly sorry your economic situation is so harsh. I'm hoping not to end up in the same situation in 10 or 20 years when I'm far less able to deal with it.
Nice happy looking charts, statistics, and cheery words for ideologs. Nothing to do with the reality here in California.
I don't see anything happy-looking about the charts. I'm almost afraid to post them because they show substantially rising inflation since December in both the PCE and the CPI, both regular and core, based on the rolling 3 month averages. (Well, actually the core CPI's rise began in August). I'm sure it makes a lot of people here unhappy (including me) to see that given the closeness of the next election.
And as far as happy-looking statistics, all 4 of those measures have a latest 3 month average increase at or above 4.4% (annualized), more than double the Fed's target 2%.
OK, as for "cheery words", I did mention, in one sentence in my long post that the average inflation-adjusted earnings of production and non-supervisory workers -- and of private sector workers -- is up in the last 2 years, and above the pre-pandemic level.
That's the only bright spot I see in the current retail inflation picture.
That doesn't make me an "ideolog". I would be an ideolog if I intentionally left that out and made it all about rising inflation that is more than double the Fed's target.
By the way, the rise in paychecks doesn't help me as a sick -- and perhaps chronically ill -- retiree with no paycheck.
As another by-the-way, what is considered the best measure of earnings (wages and salaries) is the quarterly ECI (Employment Cost Index) report, which is coming out Tuesday April 30. It is the one measure of earnings that is still below the pre-pandemic level, so this will be interesting to see if that's still true after the update. The latest (from nearly 3 months ago, with graph): https://www.democraticunderground.com/10143152174#post2
And guiltily, I guess, I made the positive mention in #5 that:
"Next time the 3 month graphs should look better -- in most of the inflation measures, the January number is big or especially bigly-big; January will drop out of the rolling 3-month window, so at worst, it will stop looking like a relentless increase and even curl down some. (By January numbers, I mean the one-month increase of January over December)"
I felt I would be an ideolog if I left that out when I was aware of it.
I went ahead and did the extra work of projecting what the PCE graphs that included April would look like if the April rise over March was the same as the March rise over February (0.3%):
And yes, they do show the projected downturn in the 3 month average increases. But yes, the prices are still shown to be rising at a rate well above the Fed's 2% target.
I also looked at the CPI and Core CPI on the same basis -- assuming April comes in at 0.3% higher than March -- and they both show a downturn too in the 3 month average (though the regular CPI is more like a plateauing, going down only slightly from 4.60% to 4.57%).
I have never been one to present only all-positive or all-negative on inflation. As a scientist, I call them as I see them. I would be a polemicist if I presented just one side of it. A scientist cannot be a polemicist, and a polemicist is not a scientist -- they are mutually exclusive.
More than once I've disparaged the "falling rents are going to save us" meme since I've been hearing for a year and a half that new leases are falling and it will take a few months to work its way into the CPI. Eighteen months later it's still the biggest contributor to core inflation increases.
More than once I've disparaged the usual narrative of the 12 month (aka year-over-year) numbers showing a decline so "inflation is coming down". That's why I present the month-to-month bar graphs and the 3 month rolling average to show what is happening RECENTLY, not some statistic that has 6 months of 6-month-or-older data. And which goes down if the incoming month's increase is lower than the one 13 months ago that is dropping out of the window. That just doesn't seem useful to me for looking at RECENT inflation.
Sometimes it turns out that the 3 month and 6 month averages look better than the 12 month averages, and sometimes the opposite. I post them as they are, not just the ones that fits my "ideology".
I post the friggin graphs because I think the media presentation of the 12 month average (year-over-year) and the latest month-over-month change leaves out too much information. People dismiss the latest month-over-month number as a "one off" or "just one month's number" (and I'm inclined to agree which is why I favor rolling 3-month averages -- it's a lot harder to call those a "one off" ).
And they are misled by looking at just the 12 month average. Particularly, when it rises from one report to the next, it only rises by a small amount that people dismiss. Well, yeah, in a 12 month's rolling average, any month's increase is watered down by a factor of 1/12, so even if the latest month-over-month number is large, the change in the 12-month average looks like a little bump up -- and people just say, oh it’s a little bump up due to seasonal factors (the numbers are seasonally adjusted by the way).
Even a large 3 month increase gets watered down by a factor of 1/4 in a 12-month rolling average.
I'm not the only one that looks at shorter periods like 3 and 6 months:
https://finance.yahoo.com/news/new-inflation-reading-reinforces-feds-higher-for-longer-stance-144840988.html
Fed Chair Jay Powell warned about today's PCE reading on April 16, saying he didn’t expect it to show progress and that measures of inflation on a three- and six-month basis are now more elevated.
(emphasis added)
The Feds look at graphs like these and others for example the Consumer Sentiment and Consumer Confidence indexes that survey consumers on their expectations of future inflation. I don't think they pay any heed to message board linkless anecdotes about doubling and tripling prices.
While all of this may seem irrelevant to "reality", the reality is that the Feds look at the same information I'm presenting (and of course a lot more) and they make the decisions about increasing or cutting rates based on them. These are decisions that affect my dwindling (in purchasing power) nest egg and the prices I pay. It's a reality I have to live with whether or not I think they are in another state or planet or not.
