{"id":202904,"date":"2024-02-29T10:00:00","date_gmt":"2024-02-29T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=202904"},"modified":"2024-03-01T11:26:37","modified_gmt":"2024-03-01T16:26:37","slug":"feds-go-to-inflation-gauge-hits-the-mark-personal-income-surges-in-january","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/feds-go-to-inflation-gauge-hits-the-mark-personal-income-surges-in-january\/","title":{"rendered":"Fed&#8217;s Go-To Inflation Gauge Hits The Mark, Personal Income Surges In January"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-zinger-key-points\">ZINGER KEY POINTS<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>January&#8217;s PCE report shows easing annual inflation to 2.4%, aligning with Fed&#8217;s 2% target, amid rate cut speculations.<\/li>\n\n\n\n<li>Personal income jumps 1%, spending growth slows; market reacts with lower yields and a slight dollar dip.<\/li>\n<\/ul>\n\n\n\n<p>The Federal Reserve\u2019s preferred measure of inflation \u2013 the Personal Consumption Expenditure (PCE) price index \u2013 matched expectations in January, underscoring progress in the path to&nbsp;<a href=\"https:\/\/www.benzinga.com\/topic\/inflation\" target=\"_blank\" rel=\"noreferrer noopener\">the 2% inflation target.<\/a><\/p>\n\n\n\n<p>Ahead of the release, traders had been leaning towards the likelihood of a Fed rate cut by the end of the first half.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">January\u2019s PCE Report: Key Highlights<\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><thead><tr><th>Measure<\/th><th>December 2023<\/th><th>January 2024<\/th><th>Expected<\/th><\/tr><\/thead><tbody><tr><td>PCE Inflation (Year-on-Year)<\/td><td>2.6%<\/td><td>2.4%<\/td><td>2.4%<\/td><\/tr><tr><td>PCE Inflation (Month-over-Month)<\/td><td>0.2%<\/td><td>0.3%<\/td><td>0.3%<\/td><\/tr><tr><td>Core PCE Inflation (Year-on-Year)<\/td><td>2.9%<\/td><td>2.8%<\/td><td>2.8%<\/td><\/tr><tr><td>Core PCE Inflation (Month-over-Month)<\/td><td>0.2%<\/td><td>0.4%<\/td><td>0.4%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The annual PCE inflation rate eased slightly from 2.6% in December 2023 to 2.4% in January 2024, matching the anticipated decline to 2.4%, according to the Bureau of Economic Analysis (BEA) report released Thursday.<\/li>\n\n\n\n<li>On a monthly basis, the PCE price index edged up by 0.3%, picking up pace from the previous month\u2019s 0.2% increase and meeting expectations.<\/li>\n\n\n\n<li>Excluding energy and food, the core PCE index saw a year-on-year surge of 2.8%, down from the 2.9% rate seen December and in line with the expected decrease to 2.8%.<\/li>\n\n\n\n<li>Month-over-month, the core PCE rose by 0.4%, accelerating from December\u2019s 0.2% pace and matching the anticipated 0.4%.<\/li>\n\n\n\n<li>Simultaneously, personal income saw a 1% increase in January, significantly higher than previous month\u2019s 0.3% print, well above expectations of 0.4%.<\/li>\n\n\n\n<li>However, personal spending only inched up by 0.2% month-over-month, marking a slowdown from the previous month\u2019s 0.7% increase, and matching expectations.<\/li>\n\n\n\n<li>Weekly jobless claims inched higher from 202,000 to 215,000 for the week ending Feb. 24, slightly above the expected 210,000.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Initial market reactions: Yield, Dollar Rise<\/h2>\n\n\n\n<p>Ahead of Wall Street opening bells, yields on U.S. Treasury bonds fell across the board, with the 10-year benchmark yield falling to 4.28%, minutes after the PCE release.<\/p>\n\n\n\n<p>The U.S. dollar index (DXY) inched lower.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted February 29, 2024 &#8211; <a href=\"https:\/\/www.benzinga.com\/news\/econ-s\/24\/02\/37392512\/feds-preferred-inflation-gauge-matches-expectations-personal-income-soars-thursdays-economic-digest\">Fed&#8217;s Go-To Inflation Gauge Hits The Mark, Personal Income Surges In January<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>January&#8217;s PCE report shows easing annual inflation to 2.4%, aligning with Fed&#8217;s 2% target, amid rate cut speculations.<\/p>\n","protected":false},"author":1128,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[3221,77,570,1685],"contributors-categories":[13584],"class_list":{"0":"post-202904","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-economic-data","13":"tag-fed","14":"tag-inflation","15":"tag-macro","16":"contributors-categories-benzinga"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Fed&#8217;s Go-To Inflation 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