{"id":186,"date":"2023-01-27T20:32:59","date_gmt":"2023-01-28T01:32:59","guid":{"rendered":"https:\/\/embarrdowns.com\/?p=186"},"modified":"2023-01-27T20:33:00","modified_gmt":"2023-01-28T01:33:00","slug":"inflation-slowing-consumer-spending-down-fed-raises-interest-rates","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/inflation-slowing-consumer-spending-down-fed-raises-interest-rates\/","title":{"rendered":"Inflation Slowing, Consumer Spending Down: Fed Raises Interest Rates"},"content":{"rendered":"

The Federal Reserve’s preferred measure of inflation for the U.S. cooled again in December, according to the Commerce Department’s Personal Consumption Expenditures (PCE) price index report released Friday.[0]<\/a><\/sup> Core PCE, which strips out the more volatile food and energy categories, increased by 4.4% annually, down from November’s annual rate of 4.7%.[1]<\/a><\/sup> Monthly, it increased by 0.3%.[2]<\/a><\/sup><\/p>\n

The PCE data comes as something of a reaffirmation of the December Consumer Price Index (CPI) report, which was released earlier in January.[3]<\/a><\/sup> The report indicated a 0.1% decrease in prices month-to-month, amounting to a 6.5% rise year-over-year, including a 5.7% surge in core inflation.[3]<\/a><\/sup> The drop in the PCE has been mirrored in other measures of inflation, such as the Labor Department’s consumer price index, which fell to 6.5 percent annually off a high last year of 9.1 percent, and the producer price index (PPI), which sank to a recent low of 6.2 percent in December, with core PPI hitting 4.6 percent.[4]<\/a><\/sup><\/p>\n

Consumers spent less in December, even as the pace of price increases cooled.[5]<\/a><\/sup> Adjusted for inflation, spending decreased by 0.2% in the month, a drop more significant than the 0.1% decrease predicted by Wall Street. In December, spending after accounting for inflation dropped by 0.2%, which was worse than the 0.1% decrease that Wall Street had predicted. After taking into account the effects of inflation, consumer spending dropped by 0.3% in real terms.<\/p>\n

In March of 2022, the central bank took action to combat rising inflation, increasing the benchmark borrowing rate from the near-zero range to a target range of 4.25%-4.5%. In an effort to reduce inflation, the benchmark borrowing rate has been increased to a target range of 4.25-4.5%. At the upcoming Federal Open Market Committee policy meeting, analysts anticipate that the rate will go up by a quarter of a percent, with a similar increase occurring in March. After this, the Fed is expected to take a break and evaluate the effects of the rate increases on the economy.[6]<\/a><\/sup><\/p>\n

On Friday, a closely observed indication of consumer opinions on the economy demonstrated a rise in confidence in January for the second month consecutively.[2]<\/a><\/sup> January’s consumer sentiment index for the University of Michigan came in at 64.9, representing an increase of nearly 9% from the previous month.[7]<\/a><\/sup><\/p>\n

0. <\/span>“PCE Data Show Another Drop in Fed’s Preferred Inflation Gauge” Barron’s, 27 Jan. 2023, https:\/\/www.barrons.com\/articles\/pce-index-inflation-data-report-today-51674762709<\/a><\/a><\/p>\n

1. <\/span>“Inflation cools further ahead of key Federal Reserve meeting” The Hill, 27 Jan. 2023, https:\/\/thehill.com\/policy\/finance\/3832937-inflation-cools-further-ahead-of-key-federal-reserve-meeting\/<\/a><\/a><\/p>\n

2. <\/span>“The Fed’s favorite inflation gauge shows price hikes cooled last month” KAKE, 27 Jan. 2023, https:\/\/www.kake.com\/story\/48247881\/the-feds-favorite-inflation-gauge-shows-price-hikes-cooled-last-month<\/a><\/a><\/p>\n

3. <\/span>“Stock Market Crash Alert: Mark Your Calendars for Jan. 27” InvestorPlace, 24 Jan. 2023, https:\/\/investorplace.com\/2023\/01\/stock-market-crash-alert-mark-your-calendars-for-jan-27\/<\/a><\/a><\/p>\n

4. <\/span>“PCE inflation rises 4.5% Y\/Y in December, slowing from +4.7% in prior month” Seeking Alpha, 27 Jan. 2023, https:\/\/seekingalpha.com\/news\/3928933-pce-inflation-rises-45-yy-in-december-slowing-from-47-in-prior-month<\/a><\/a><\/p>\n

5. <\/span>“Key Fed Inflation Measure Eased in December While Consumer Spending Also Declined” NBC 5 Dallas-Fort Worth, 27 Jan. 2023, https:\/\/www.nbcdfw.com\/news\/business\/money-report\/key-fed-inflation-measure-eased-in-december-while-consumer-spending-also-declined\/3180192\/<\/a><\/a><\/p>\n

6. <\/span>“PCE Indicates Slowdown In Spending, Economy Weakens” MarketBeat, 27 Jan. 2023, https:\/\/www.marketbeat.com\/originals\/pce-indicates-slowdown-in-spending-economy-weakens<\/a><\/a><\/p>\n

7. <\/span>“The Fed’s favorite inflation gauge shows price hikes cooled last month” CNN, 27 Jan. 2023, https:\/\/www.cnn.com\/2023\/01\/27\/economy\/pce-inflation-december\/index.html<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve’s preferred measure of inflation for the U.S. cooled again in December, according to the Commerce Department’s Personal Consumption Expenditures (PCE) price index report released Friday.[0]<\/a><\/sup> Core PCE, which strips out the more volatile food and energy categories, increased by 4.4% annually, down from November’s annual rate of 4.7%.[1]<\/a><\/sup> Monthly, it increased by 0.3%.[2]<\/a><\/sup><\/p>\n

The PCE data comes as something of a reaffirmation of the December Consumer Price Index (CPI) report, which was released earlier in January.[3]<\/a><\/sup> The report indicated a 0.1% decrease in prices month-to-month, amounting to a 6.5% rise year-over-year, including a 5.7% surge in core inflation.[3]<\/a><\/sup> The drop in the PCE has been mirrored in other measures of inflation, such as the Labor Department’s consumer price index, which fell to 6.5 percent annually off a high last year of 9.1 percent, and the producer price index (PPI), which sank to a recent low of 6.2 percent in December, with core PPI hitting 4.6 percent.[4]<\/a><\/sup><\/p>\n

Consumers spent less in December, even as the pace of price increases cooled.[5]<\/a><\/sup> Adjusted for inflation, spending decreased by 0.2% in the month, a drop more significant than the 0.1% decrease predicted by Wall Street. In December, spending after accounting for inflation dropped by 0.2%, which was worse than the 0.1% decrease that Wall Street had predicted. After taking into account the effects of inflation, consumer spending dropped by 0.3% in real terms.<\/p>\n

In March of 2022, the central bank took action to combat rising inflation, increasing the benchmark borrowing rate from the near-zero range to a target range of 4.25%-4.5%. In an effort to reduce inflation, the benchmark borrowing rate has been increased to a target range of 4.25-4.5%. At the upcoming Federal Open Market Committee policy meeting, analysts anticipate that the rate will go up by a quarter of a percent, with a similar increase occurring in March. After this, the Fed is expected to take a break and evaluate the effects of the rate increases on the economy.[6]<\/a><\/sup><\/p>\n

On Friday, a closely observed indication of consumer opinions on the economy demonstrated a rise in confidence in January for the second month consecutively.[2]<\/a><\/sup> January’s consumer sentiment index for the University of Michigan came in at 64.9, representing an increase of nearly 9% from the previous month.[7]<\/a><\/sup><\/p>\n

0. <\/span>“PCE Data Show Another Drop in Fed’s Preferred Inflation Gauge” Barron’s, 27 Jan. 2023, https:\/\/www.barrons.com\/articles\/pce-index-inflation-data-report-today-51674762709<\/a><\/a><\/p>\n

1. <\/span>“Inflation cools further ahead of key Federal Reserve meeting” The Hill, 27 Jan. 2023, https:\/\/thehill.com\/policy\/finance\/3832937-inflation-cools-further-ahead-of-key-federal-reserve-meeting\/<\/a><\/a><\/p>\n

2. <\/span>“The Fed’s favorite inflation gauge shows price hikes cooled last month” KAKE, 27 Jan. 2023, https:\/\/www.kake.com\/story\/48247881\/the-feds-favorite-inflation-gauge-shows-price-hikes-cooled-last-month<\/a><\/a><\/p>\n

3. <\/span>“Stock Market Crash Alert: Mark Your Calendars for Jan. 27” InvestorPlace, 24 Jan. 2023, https:\/\/investorplace.com\/2023\/01\/stock-market-crash-alert-mark-your-calendars-for-jan-27\/<\/a><\/a><\/p>\n

4. <\/span>“PCE inflation rises 4.5% Y\/Y in December, slowing from +4.7% in prior month” Seeking Alpha, 27 Jan. 2023, https:\/\/seekingalpha.com\/news\/3928933-pce-inflation-rises-45-yy-in-december-slowing-from-47-in-prior-month<\/a><\/a><\/p>\n

5. <\/span>“Key Fed Inflation Measure Eased in December While Consumer Spending Also Declined” NBC 5 Dallas-Fort Worth, 27 Jan. 2023, https:\/\/www.nbcdfw.com\/news\/business\/money-report\/key-fed-inflation-measure-eased-in-december-while-consumer-spending-also-declined\/3180192\/<\/a><\/a><\/p>\n

6. <\/span>“PCE Indicates Slowdown In Spending, Economy Weakens” MarketBeat, 27 Jan. 2023, https:\/\/www.marketbeat.com\/originals\/pce-indicates-slowdown-in-spending-economy-weakens<\/a><\/a><\/p>\n

7. <\/span>“The Fed’s favorite inflation gauge shows price hikes cooled last month” CNN, 27 Jan. 2023, https:\/\/www.cnn.com\/2023\/01\/27\/economy\/pce-inflation-december\/index.html<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/186"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=186"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/186\/revisions"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}