In this morning’s data, Personal Income increased 0.2% in July, less than expected. Personal Spending increased 0.1% in July, much less than expected and Real Personal Spending, which accounts for inflation, was up 0.2% in July which is stronger than in recent months. The PCE Deflator fell in July by -0.1% but remains elevated on an annual basis at 6.3%. The Core PCE Deflator, which excludes food and energy prices, grew 0.1% in July and 4.6% on an annual basis. However, both the month-to-month and annual figures fell for the headline and core PCE deflator.
Overall, only slight increases in income and spending in July suggest a hint of slowing in the economy. However, real spending which accounts for inflation is higher than it has been in recent reports as inflation measures were flat to slightly lower in July. However, overall inflation levels are still stubbornly elevated, as indicated by the annual figures. Even with parts of the economy slowing, including housing, the Federal Reserve is likely to stay the course on monetary tightening in the months ahead to ensure inflation is soundly subdued.
In all, the 10-year US Treasury yield ticks slightly lower following the report and equity futures are also lower as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice, and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.