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Monday, April 30, 2012

Fed Watch: Spending Update

The first of two posts from Tim Duy:

Spending Update, by Tim Duy: 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.

    Posted by on Monday, April 30, 2012 at 12:06 PM in Economics, Fed Watch | Permalink  Comments (3)

          


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