Highest PCE Core Inflation in 30 Years

Now that it’s the first business day of the month, the ISM Manufacturing report came out. The reading for September was 61.1 which is very good. That’s up from 59.9 in August. Economists had been expecting 59.6. This means that the factory sector of the economy is still moving along.

After the GDP report, we always get the personal income and spending reports. For August, spending rose by 0.8% and income was up 0.2%. That’s not bad.

With the income and spending reports, we also get the inflation reports. This is different from the CPI report. Some economists, most prominently at the Fed, think this is a better measure of inflation.

For the 12 months ending in August, the PCE price index rose by 4.3%. The core PCE price index rose by 3.6%. The latter is the largest jump in more than 30 years.

The stock market is up so far today. The Dow is outpacing the S&P 500 thanks to Merck. The drug company said its new Covid pill reduces the risk of hospitalization by half for some patients. Merck is up 9% today.

Posted by on October 1st, 2021 at 12:54 pm


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