One of The Fed's favorite inflation indicators - Core PCE Deflator - rose 4.2% YoY in July (as expected but higher than June's +4.1%). Headline PCE jumped up to +3.3% YoY (also as expected) - the biggest jump in YoY prints since June 2022...

Source: Bloomberg

Even more focused, is the Fed's view on Services inflation ex-Shelter, and the PCE-equivalent shows that is very much stuck at high levels...

Source: Bloomberg

Services inflation accelerated in July but Goods saw the biggest MoM deflation since 2022...

Source: Bloomberg

Personal Income growth slowed for the 2nd month in a row as Spending accelerated for the 2nd month in a row...

Source: Bloomberg

On a year-over-year basis, spending accelerated as income growth decelerated...

Source: Bloomberg

Wage growth slowed:

Adjusted for inflation, 'real' personal spending was higher in July (up 3.0% YoY)...

Source: Bloomberg

But real disposable income fell 0.2% MoM - its biggest decline since June 2022...

Putting all that together, we see that the savings rate plunged to 3.5% - the lowest since Oct 2022 - down from 4.3% - the biggest drop since Jan 2022....

It appears the American consumer is completely tapped out - consumer credit has flatlined (maxx'd out) and now savings are plunging again.