US core personal consumption expenditures (PCE) inflation slowed to 3.0% year over year in August, while real personal consumption expenditures rose 0.6% from the previous month. Private employment also increased in September, leaving inflation and real-economy indicators moving in different directions.
The US Bureau of Economic Analysis (BEA) released its personal income and outlays data on September 30. Core PCE prices rose 0.2% month over month, while nominal personal consumption expenditures increased 0.9%.
The rise in real spending shows that households spent more even after accounting for inflation. However, one month of inflation data is not enough to determine whether the slowdown will continue.
Employment indicators were also firm. ADP reported that private-sector jobs increased by 90,000 in September, saying hiring growth had rebounded after slowing over the previous three months.
ADP’s figures are compiled from private payroll data. Their methodology differs from the government’s nonfarm payroll statistics, so private-sector job growth alone cannot determine the overall state of the labor market.
With inflation easing alongside increases in consumer spending and private employment, the latest data show that inflation and the real economy did not move in the same direction. The US core PCE inflation rate was 3.0% in August, while the personal saving rate fell to 4.1%, according to TokenPost’s earlier report.
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