The “core PCE” jumped 4.7% in November, against 4.2% in October in the United States. Enough to consolidate the Fed in its more “hawkish” policy announced on December 15th.
(Boursier.com) – In the middle of the end of the year holiday season, conducive to spending of all kinds, the American authorities on Thursday published the personal income and expenditure of American households in November, as well as the inflation index ” core PCE “, eagerly awaited insofar as it is the preferred indicator by the US Federal Reserve for measuring price increases.
However, this indicator “core PCE” jumped 4.7% in November over one year, against 4.2% in October, and is now the highest since 1982. Economists expected a slightly smaller increase of 4.5%. Compared to October, the “core PCE” increased by 0.5%, against + 0.4% expected.
However, this new surge in prices did not panic investors on Wall Street, where stock indexes rose for the 3rd session on Thursday, with the S&P 500 even moving to new highs.
The markets seem to have now taken into account the fact that inflation will be more durable and higher than expected, due to the Covid pandemic, which led the Federal Reserve to announce on December 15 measures to reduce its support to the markets and to project a hike in key rates during 2022, in order to curb inflation and bring it back to its long-term objective of 2% per year.
Released at the same time as “core PCE” inflation, personal income of American households for the month of November appreciated by 0.4% compared to the previous month, against 0.5% consensus. Personal consumption expenditure increased as expected by 0.6% from the previous month.
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