U.S. Spending Update

Real personal spending growth was weakish in March on the back of a solid February gain that supported spending growth for the quarter.  No surprise – don’t get overly optimistic or pessimistic about any one piece of data.  Slow and steady is the rule:

Pce3

Note that the post-recession trend is slowing somewhat as the “recovery” continues, a feature more easily evident in the year-over-year numbers:

Pce4

Inflation continues to converge to  2 percent:

Pce1

The recent trend in core inflation, however, is a little above 2 percent:

Pce2

This may get the Fed hawks a little more nervous.  With inflation hovering around 2 percent, the bar to another round of QE is pretty high.  Overall, I would say this report mirrors my overall read on GDP from last week:

Pce5
Uninspiring but not disastrous – unless, of course, you are unemployed or have any hope of seeing a return to pre-recession spending, nominal or real.  But good enough to keep the Fed on the sidelines.

This post originally appeared at Tim Duy’s Fed Watch and is posted with permission.