Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)From the International Trade Court, "Because of the Constitution's express allocation of the tariff power to Congress, we do not read IEEPA to delegate an unbounded tariff authority to the President. We instead read IEEPA's provisions to impose meaningful limits on any such authority it confers."

2)The PCE inflation stats were as expected with it following CPI and PPI that were reported weeks ago. Both headline and core for April rose .1% m/o/m with the y/o/y gains being 2.1% and 2.5% respectively vs 2.3% and 2.7% in the month before. Versus last year, the disinflation continued with goods prices down .4% while services inflation offset that, rising by 3.3%.

3)There was an .8% m/o/m rise in income in April that was well above the .3% consensus. This took the savings rate to 4.9% from 4.3% but the income surprise was very isolated. The main factors for the upside in income were the 6.9% rise in social security payments m/o/m and a 21% jump in farm income. Private sector wages and salaries, income was up by .5% m/o/m which is about in line with the 6 month trend.

4)Personal spending in April was higher by .2% m/o/m as forecasted. All of the gain came from the spend on services as the buying of goods was negative, particularly those for durable goods.

5)The May Conference Board’s Consumer Confidence index rebounded to 98 from 85.7 and was 11 pts above expectations. Almost all of the improvement was seen from the Expectations component which jumped to 72.8 from 55.4 while the Present Situation rose more modestly to 135.9 from 131.1. For perspective, this overall index stood at 109.6 in October 2024, 100.1 in February 2025. After rising by 100 bps in April to 7%, one yr inflation expectations slipped back by 50 bps to a still very elevated 6.5%.

6)The final May UoM consumer confidence index was 52.2 vs 50.8 initially and unchanged with April. The UoM said, "Sentiment had ebbed at the preliminary reading for May but turned a corner in the latter half of the month following the temporary pause on some tariffs on China goods. Expected business conditions improved after mid-month, likely a consequence of the trade policy announcement. However, these positive changes were offset by declines in current personal finances stemming from stagnating incomes throughout May. Overall, consumers see the outlook for the economy as no worse than last month, but they remained quite worried about the future."