US: Focus on PCE inflation – TDS

Analysts at TD Securities suggest that the US key core PCE price index probably rose just 0.1% in November, lowering the 12-month change to 1.5% from 1.6% in October.

Key Quotes

“Base effects should help boost the 12-month change again in Q1, but for now the pace is moving away from the Fed's 2% goal. We expect the headline PCE price index to be up 0.2% m/m, lifting the 12-month change to a still-low 1.4% from 1.3%.”

“Separately, we anticipate personal spending to advance a firm 0.4% in November, marking its strongest monthly increase in four months. Despite that, the November print should continue to indicate household spending is moderating in Q4. Lastly, we forecast UMich's consumer sentiment to have improved modestly to 99.5 from its preliminary value at 99.2 for December.”