Personal Consumption Expenditures Index Rose 0.3% in January… Excluding food and energy, the Personal Consumption Expenditures Index (PCE) rose 0.4%.
What it means— Trailing energy prices gave consumers a bit of a break but climbing food prices pushed prices higher. Compared to last year, the PCE rose 2.4% and the core PCE rose 2.8%. Those numbers are close to the Fed’s goals, but don’t expect rates to fall unless something unrelated (like bank commercial real estate) blows up. Personal income popped a full 1% last month, giving consumers a lot more purchasing power. This will give the Fed confidence to stay on the sidelines longer while inflation eventually works its way lower.
January New-Home Sales Up 1.5% From December… New home-sales edged higher to an annualized rate of 661,000, still well off the high of more than one million in August 2020.
What it means— Low existing-home inventory for sale has pushed buyers to new homes, which now make up around 15% of sales, well above the normal 10%. While that’s true, the overall industry is moving slowly, held back by interest rates. Mortgage rates rose above 7% again and the Fed is in no hurry to cut overnight rates, which leaves buyers and sellers hoping that the other side blinks first. Anecdotally, it appears that activity is picking up, but all real estate is local. We’ll know for sure when we get the numbers for existing-home sales, which inform new-home sales.
Durable Goods Orders Fell 6.1% in January, Were Down 0.3% Without Planes and Cars… Core orders rose a modest 0.1%.
What it means— This is the opposite of what happened in the months after the stimulus programs in 2020 and 2021. Back then, people were spending all the money, creating bottlenecks in the supply chain. Now, we have government-funded infrastructure spending that starts slowly but will last a long time. Business equipment spending will underpin a chunk of corporate spending for years.
Starbucks in China Celebrated Chinese Lunar New Year With Pork Latte… Called the “Abundant Year Savory Latte,” or just the “Lucky Savory Latte,” it includes espresso, steamed milk, and pork flavor sauce. It also comes with a piece of skewered pork breast meat for dipping. We have no idea if the drink was popular, but it was expensive, at an equivalent of $9.45.
Data supplied by HS Dent Research
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