July 31, 2019
Consumers continued spending at a healthy clip in June 2019, despite soft inflation, trade tensions and slowing global growth. According to the Bureau of Economic Analysis, personal-consumption expenditures (PCE) increased to a seasonally adjusted 0.3% from the previous month, while the PCE price index rose a seasonally adjusted 0.12%. The metrics were below the monthly pace needed to hit the 2% yearly inflation target set by the Federal Reserve’s Central Bank.
Furthermore, a measure of consumer sentiment rebounded in July 2019, with the Conference Board reporting its index of consumer confidence at 125.7, up from 124.3 in June. The data, however, likely won’t stop Fed officials from lowering the benchmark fed-funds rate from its current range of 2.25%-2.5%.
“These numbers are consistent with the story that the Fed has been telling, in fact, about how the fundamentals look good but the risks are still to the downside,” said PNC Financial Services Group’s Augustine Faucher.
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