PCE inflation rose 4.4% in December
Yahoo Finance Live anchors break down December core PCE inflation data.
Video Transcript
[AUDIO LOGO]
JULIE HYMAN: Let's take a look here at futures this morning because we do have some economic data out this morning. Personal consumption expenditures, which is always the Fed's preferred inflationary measure. And December core PCE coming in exactly as expected, 0.3% month-over-month. We did not see a heck of a lot of reaction in the futures, which already were trending lower. As you see there, S&P futures, NASDAQ futures also down about a 1/2 of 1%.
And if we take a look at treasuries as well, this is the price, which moves inversely to yield. Again here, not a lot of change, a little bit off the lows here. So this means if prices are lower, that means that yields are a little bit higher here.
You guys, just running through some of the other numbers that we got here related to inflation. Basically, what this does is sort of props up the government case or the Fed's case, if you will, to continue to do what it's been doing. That inflation is moderating to some degree here.
BRAD SMITH: Yeah, and the increase is in compensation, as well. That was highlighted within this report, especially as it related to the increase in current dollar personal income here. So those increases in compensation, those reflected increases in private wages and salaries, in services-producing industries and goods-producing industries. And why I bring that up is because this also plays into some of that disposable personal income that was reported in the report. That actually went up by about 3/10 of a percent for the recent month.
BRIAN SOZZI: Yeah, I mean, I think of course, the read here is that inflation is clearly slowing. That probably locks in a 25 basis point rate hike from the Fed when we hear from them shortly. Market likes to hear that.
And I think, you know, off of this report, we saw a little bit of a reversal in the futures, as you would expect. I mean, maybe now we can start getting back to that talk of a Fed pivot and what essentially would mean a pause in rate hikes by the middle of this year.
JULIE HYMAN: And we're gonna talk much more about the consumer backdrop and what we saw. We also got personal spending numbers for December that were down by 2/10 of 1%. That's a little bit of a re-- of an acceleration from a drop of a 1/10 of 1% in November. In other words, consumer spending is-- was pulling back a little bit, which is interesting, was happening during the holiday season. We also got a lot of the card companies, the credit card companies reporting, which we're gonna talk about a little and about what that signals about what the consumer is doing.
