U.S. PCE INFLATION LIKELY TO HAVE ACCELERATED YEAR-ON-YEAR IN MARCH
28 April 2018, 00:05
U.S. personal income and spending data for March is set to be released next week. According to a TD Economics research report, the headline PCE inflation is likely to have accelerated to 2 percent year-on-year, reflecting a flat sequential print. Consistent with the consumer price index report, energy prices are expected to have come in lower on the month with food prices rising modestly by 0.1 percent.
In the meantime, the core PCE is expected to have come in relatively weak at 0.1 percent, pushing the year-on-year rate to 1.9 percent. A move to 2 percent is unlikely given the quarterly data released in the first quarter GDP report, where core PCE saw a rise of 1.7 percent, stated TD Economics.
Nominal PCE is expected to have recorded a 0.4 percent rise in March on a rebound in durables, translating to the reported 1.1 percent rise in real first quarter real consumer spending. The softness is seen as temporary since residual seasonality, weather and delayed tax refunds partially added to the slowdown.
“Solid incomes, confidence and tight labor markets also underpin a solid rebound in Q2 back near 3 percent. We look for a 0.3 percent increase in March personal income, in line with a robust 3.6 percent advance in Q1 incomes”, added TD Economics.
At 21:00 GMT the FxWirePros Hourly Strength Index of US Dollar was neutral at -6.13125. For more details on FxWirePros Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest