No Whammies From PCE

While jobless claims and the Employment Cost Index can be market movers, today’s biggest ticket in the 8:30am slot was the monthly PCE Price Index for June. Forecasters are generally more accurate when predicting these numbers because previously released reports reveal a majority of PCE components. That means we have to dig a little in order to find surprises. In today’s case, core monthly PCE was 0.256 unrounded versus a median forecast of 0.320 (which looks better than the conventional 0.3 vs 0.3). That good news was tempered by increasingly visible goods inflation along with the knowledge that actual tariff impacts lag the announcement. 

In light of that fact as well as the lower jobless claims and higher employment costs, bonds are doing a good job by holding modest overnight gains.