USA: Household spending is accelerating, so is the ‘PCE’ inflation index

(Boursier.com) — According to the US government report, the personal income of US households for the month of April increased by 0.4% compared to the previous month, in line with market expectations. Personal spending jumped 0.8%, against an expected 0.5% increase. A month earlier, personal income had increased by 0.3% and expenses by 0.1%.

The highly monitored ‘PCE’ price index linked to expenditure posted an increase of 0.4% compared to the previous month, slightly higher than the consensus (+0.3%), after +0.1% one month earlier. The index reflects a price increase (adjusted) of 4.4% over one year against 4.3% consensus. The “core” PCE price index (adjusted) posted an increase of 4.7% over one year, after +4.6% in March, and against 4.6% consensus.