US500 erases post-PCE losses

The US data pack for November was released at 1:30 pm GMT today. Attention was mostly on PCE inflation data which initially was considered by markets as rather disappointing, however sellers failed to uphold momentum. 

The personal consumption expenditure price index in the United States increased by 5.5% year-on-year in November, only slightly below analysts’s estimates and the lowest since October of 2021 and below 6% in September. Prices for goods rose 6.% and prices for services jumped 5.2%. Food cost increased 11.2% and energy prices surged 13.6%. Compared to the previous month, the PCE Price Index rose by 0.1%, below 0.4% in the previous month. The core PCE annual rate, which is the Fed's preferred gauge of inflation, dropped to a four-month low of 4.7% in November from 5% in the prior month, slightly above market forecasts of 4.6%.

The Fed's favorite inflation indicator - Core PCE Deflator disappointed slightly in November. Source: Bloomberg via ZeroHedge

Personal income increased 0.4% from a month earlier in November, following a 0.7% rise in October and above market expectations of a 0.3% gain. The increase primarily reflected increases in compensation and personal income receipts on assets. The increase in compensation reflected increases in private wages and salaries in both services-producing industries and goods-producing industries. 

Personal spending in the US edged up a meager 0.1% month-over-month in November, following an upwardly revised 0.9% jump in October and below market forecasts of 0.2%, as consumer spending cooled during the holiday season. Spending on services went up by $79.2 billion, led by housing, offsetting a $59.5 billion decrease in spending on goods, namely new light trucks. 

US500 initially fell, however buyers manage to quickly regain control and index jumped to new session highs. Source: xStation5