November Core PCE will be the highlight – BBH

Analysts at BBH offer a brief preview of Friday’s important US macro data, the Personal Consumption Expenditure (PCE) Price Index. The Fed’s preferred inflation gauge – Core PCE Price Index – is expected to have decelerated to the 4.7% YoY rate in November from 5.0% in the previous month.

Key Quotes:

“Consensus sees 4.6% y/y vs. 5.0% in October.  If so, it would be the second straight deceleration to the lowest since October 2021.  That said, this drop is due in large part to high base effects from 2021 and the Fed’s 2% target still seems a long way off.  Indeed, we have always felt that getting core PCE from nearly 6% down to 4% is the easy part; getting it from 4% to the 2% target is the hard part and that is where the pain comes in.  Personal income and spending will be reported at the same time and are expected at 0.3% m/m and 0.2% m/m, respectively.”

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