Interesting economic data to go through

January PCE inflation rose by .3% both headline and core m/o/m and by 2.5% and 2.6% y/o/y respectively. All as expected as it usually is with these inflation stats as they come weeks after the CPI and PPI figures. The y/o/y gains compare with 2.6% and 2.8% in the month before.

This compares with CPI that is up 3% headline and 3.3% core in January because of the higher housing weighting and out of pocket healthcare expense measurement vs PCE that relies on Medicare and Medicaid. So I’ll say again, the Fed is relying on a faulty inflation gauge in making policy with PCE and Jay Powell specifically said PCE is better in front of Congress but no one asked him why in light of this.

Personal income surprised to the upside with a .9% m/o/m pop, more than double the estimate of up .4%. Private sector wages and salaries though were up by a more modest .4% m/o/m which was the same amount seen in December. The reason for the headline beat was a 39% m/o/m spike in farmers income and a 1.8% rise in transfer payments.