The Fed's favorite inflation indicator - Core PCE - came in hotter than expected in May, rising 0.2% MoM (+0.1% MoM exp) and +2.7% YoY (+2.6% YoY exp)...

Not exactly the hyped-up inflationary surge the tariff fearmongers had hoped for as non-durable goods price show modest increase MoM...

Headline PCE rose 0.1% MoM (as expected) and the YoY change ticked up to +2.3% YoY...

Non-durable goods flipped from deflationary to inflationary (modestly) in May...

SuperCore PCE inched higher on a YoY basis (from +3.07% to +3.12% YoY)...

Both personal income and spending tumbled in May (the former by the most since Sept 2021)...

On the income side, govt workers saw wage growth slow:

But, Income's drop was mainly due to a plunge in government handouts...

With the biggest drop in social security benefit handouts ever as DOGE killed all the payments to those 'dead' or extremely old people...

The savings rate dropped significantly to 4.5% of DPI...

Is there enough here to nudge The Fed towards a cut? Or do we keep waiting for the 'lagged' effect of tariffs to finally show up in prices?

This is the 'transitory' no inflationary impact period!

...as DOGE killed all the payments to those 'dead' or extremely old people...
{ai:summary}Core PCE inflation rose 0.2% MoM and 2.7% YoY in May, exceeding expectations. Headline PCE increased by 0.1% MoM, with a YoY change of 2.3%. Non-durable goods prices showed a modest increase, while personal income and spending fell, largely due to a significant drop in government handouts.Wage growth for private workers increased to 4.6% YoY, but government worker wages slowed to 5.2%. The savings rate also dropped to 4.5% of disposable personal income. The data raises questions about potential Fed interest rate cuts amid ongoing concerns about inflation. #economy

DOGE Sparks Biggest Plunge In Social Security Handouts Ever; Fed's Favorite Inflation Indicator Ticked Higher In May

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