US personal income and spending - Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 23, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Analysts at Nomura noted that personal income increased by 0.3% m-o-m in November, above market expectations but below our forecast (Nomura: 0.4%, Consensus: 0.2%).

    Key Quotes:

    "Personal spending increased by 0.3% m-o-m in November following a revised flat reading in October (previously reported as +0.1% m-o-m). Personal spending rebounded on stronger goods spending while service spending lagged behind.

    A bulk of the weakness in service spending came from energy services, which took a tumble as the weather has been unseasonably warm across large swaths of the country.

    On inflation, the PCE deflator was unchanged over the month (0.4% y-o-y) in November, below expectations but right in line with our expectations (Nomura: 0.0% m-o-m, Consensus: 0.1% m-o-m). Core PCE increased by 0.1% m-o-m (unrounded: 0.0114%), in line with expectations (Nomura: 0.0110% m-o-m, Consensus: 0.1% m-o-m), which left the year-over-year metric at 1.3% y-o-y.

    In line with our expectations, health care prices remained subdued only increasing by 0.06% m-o-m, well below the CPI’s measure, which increased by 0.4% m-o-m in November. The discrepancy is likely attributable to the different source data used in calculating the respective indexes.

    Looking ahead, an expected waning of the negative base-effect will likely boost core PCE inflation to some extent. But as long as the underlying trend of medical care inflation (which carries a decent amount of weight in the core index) does not pick up, core PCE inflation is unlikely to accelerate materially."
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