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U.S. consumer spending surges in January; inflation heats up

Sven
edited February 2023 in Other Investing
PCE went up in January as CPI. This is one of Fed’s metric monitored carefully. As a result, another round of sell off in both stocks and bonds today.
The personal consumption expenditures (PCE) price index shot up 0.6% last month, the largest increase since June 2022, after gaining 0.2% in December. In the 12 months through January, the PCE price index accelerated 5.4% after rising 5.3% in December.
Excluding the volatile food and energy components, the PCE price index increased 0.6%. That was the biggest gain since August 2022 and followed a 0.4% rise in December. The so-called core PCE price index increased 4.7% on a year-on-year basis in January after advancing 4.6% in December.
The Fed tracks the PCE price indexes for monetary policy. The government reported on Thursday that inflation increased much faster than initially thought in the fourth quarter, mostly reflecting upgrades to consumer and producer price data published this month. That left some economists to expect that the road to disinflation would be slow and bumpy.
https://fidelity.com/news/article/top-news/202302240842RTRSNEWSCOMBINED_KBN2UY12C-OUSBS_1

Comments

  • yogibearbullyogibearbull
    Annualized CPI, PPI, PCE were ALL higher than expected. That is BAD.

    However, the (wholesale) PPI was LESS than the (retail) CPI and that is good.

    The AAII Sentiment Indicator collapsed (see a nearby thread). Don't sell much when the Sentiment is very poor.

    Thrust indicators from January/February remain in place until proven otherwise.

    But keep an eye on SP500 200-dMA and VIX. https://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p70110975086
  • MikeMMikeM
    U.S. consumer spending surges in January; inflation heats up
    I'm afraid this is my fault. I bought a new 3-wood from Dicks last weekend.
  • hank
    edited February 2023
    No Mike. I don’t know what a 3-wood costs. But likely not as much as I just pre-paid for a room in Manhattan in May! (And work on that nasty slice now.) :)
  • Old_JoeOld_Joe
    @MikeM- Dammit Mike, knock that off. Just as I was watching my ASML finally get into the black again you ruined the whole thing. Jeeze...
  • MikeMMikeM
    Ha Ha, yeah, not a nice day. I'm glad now that I didn't replace my whole set. Who knows what would of happened.
  • Sven
    Dollar-cost-average in is still work, especially days like today. There is likely to have more than 3 25 bps rate hikes this year given the PCE number, and any pivoting will be in 2024. The tight labor market and high service cost is making the inflation sticky, and that is not easily solved.
  • CrashCrash
    "...The tight labor market and high service cost is making the inflation sticky, and that is not easily solved."

    Hit the nail on the head. (Sigh.). What to do? Ride it out. No buying or selling today. Gotta increase my store of dry powder. Sweep account is treating me nicely, these days. Mr. Market will no doubt stumble further and lower in days to come. The inflation news sucks hard, like a Hoover. But given the circumstances, it's not hard to understand.
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