Inflation Keeps Increasing in US Too, Unlike in Europe
The fundamental data from Europe has shown some renewed economic weakness in the last two months, particularly regarding inflation, which turned negative in the Eurozone in September, as shown by the CPI (Consumer Price Index) report. In the US, the fundamental data is showing the opposite, namely that the economic rebound is going well, despite having lost some pace since the first couple of months.
Yesterday, unemployment claims declined, while prices showed another increase. So, things are going in the right direction in the US, but the USD is not benefiting from it. However, it will begin to do so, once it becomes clear who will win the elections in the US. Below is the PCE report for August:
US personal income and spending report for August 2020
- August PCE core YoY +1.6% vs +1.4% expected
- July was +1.3% (revised to +1.4%)
- PCE core MoM +0.3% vs +0.3% expected
- July PCE MoM +0.3% (revised to +0.4%)
- Deflator YoY +1.4% vs +1.2% expected
- Prior deflator YoY +1.0% (revised to +1.1%)
- Deflator MoM +0.3% vs +0.3% expected
- Prior MoM deflator +0.3% (revised to +0.4%)
Consumer spending and income for August:
- Personal income -2.7% vs 2.5% expected. Prior month +0.4% (revised to +0.5%)
- Personal spending +1.0% vs +0.8% expected. Prior month +1.9% (revised to +1.5%)
- Real personal spending +0.7% vs +0.5% expected. Prior month +0.1%
The consumer income declined in August, but that was due to the COVID-19 unemployment packages ending. The spending on the other hand, kept pace. But, the USD is waiting for the stimulus package to be passed, and it is ignoring the data right now.
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