Weekly Update 5/26/2023: Inflation Trends Up
Key data was released this morning from the Bureau of Economic Analysis concerning the latest personal income and spending data.
Key data was released this morning from the Bureau of Economic Analysis concerning the latest personal income and spending data.
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There were signs of cooling with annual wages rising at a slower pace and labor force participation rate edged up ever so slightly. All these items played a role in how consumers spend their money.
A key gauge of US inflation cooled last month by more than expected and consumer spending stabilized, suggesting the Federal Reserve may be close to ending its most aggressive cycle of interest-rate hikes in decades. Excluding food and energy, the Fed’s preferred inflation gauge — the personal consumption expenditures price index — rose 0.3% in February after the prior month was revised down slightly.
On Wednesday, the Federal Open Market Committee (FOMC) decided in a unanimous vote to raise the guidance for its fed funds rate to 4.75%-5.00% from 4.50%-4.75%, a raise of 25 basis points (0.25%). This is the highest level for the fed’s benchmark since September 2007.
Hard to believe but two weeks ago, most people outside the financial world did not know a certain California bank even existed.