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…
Source: Bloomberg
With the highest MoM rise in the core deflator since 9/11…
Source: Bloomberg
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 …
Source: Bloomberg
That is the biggest MoM crash in incomes ever which sent the savings rate plunging…
Source: Bloomberg
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!
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Gimme my stimme.
Nothing to worry about. The Fed says the inflation is transitory. I’m sure the German Central Bank said the same thing in the early 1920s.
https://www.cnbc.com/2021/05/19/ford-to-halt-production-of-f-150-bronco-sport-due-to-chip-shortage.html
https://www.ntd.com/second-hand-car-prices-are-soaring_617597.html
https://www.bakersfield.com/news/ags-latest-headache-a-shortage-of-pallets-for-shipping-produce/article_bbcc2b38-ba6c-11eb-8bbe-1bcd995b662d.html
Dave Collum has posted this article a couple of times: https://www.project-syndicate.org/commentary/fed-sanguine-inflation-view-recalls-arthur-burns-by-stephen-s-roach-2021-05
It compares the current indifferent attitude of the Fed to inflation with that of the Fed in the ’70’s. Nothing new under the sun.
Maybe you have silver as it seems the us mint says there’s a global silver shortage, and value will sky rocket – last part joke!
https://halturnerradioshow.com/index.php/en/news-page/news-nation/u-s-mint-confirms-global-silver-shortage
We are getting our bronco sport Saturday. It’s a long story why, but we put money down on the only one they had coming 2 weeks ago, then that story broke….if true. There was no mention of shortage, rather than just making them, but that the big Broncos were a some months out. This is small dealership too. We’ll see Saturday.