Fed's Preferred Inflation Gauge Stalls While Spending Picks Up

[BumRushDaShow]

Source: Bloomberg

April 30, 2025 at 10:04 AM EDT
Updated on April 30, 2025 at 10:09 AM EDT


The Federal Reserve’s preferred inflation gauge stalled in March for the first time in nearly a year and consumer spending was strong, a welcome reprieve before tariffs are expected to broadly drive up prices.

The personal consumption expenditures price index stagnated from February, according to Bureau of Economic Analysis data out Wednesday. Excluding food and energy, the so-called core PCE was also unchanged, the tamest in almost five years.

Inflation-adjusted consumer spending climbed 0.7% last month after an upward revision to the prior month, suggesting households spent aggressively to get ahead of new tariffs.

The data round out a quarter in which the US economy contracted for the first time since 2022 on a monumental pre-tariffs import surge and more moderate consumer spending. The report earlier Wednesday also showed core PCE inflation accelerated to a 3.5% pace in the first quarter — the most in a year.

Read more: https://www.bloomberg.com/news/articles/2025-04-30/fed-s-preferred-inflation-gauge-stalls-while-spending-picks-up?srnd=phx-economics-v2

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People’s incomes rose 0.5% in March; spending grew 0.7%. Both figures are in current dollars.

https://bea.gov/data/income-saving/personal-income
10:00 AM · Apr 30, 2025

[Tadpole Raisin]

1. Once all that extra spending is completed to get ahead of the tariffs impact and

anticipated downturn it’s look out below. I’m guessing the advance spending was the only thing that kept the Q1 GDP at - 0.3.

Any guesses on the 2d quarter? Ouch

[FredGarvin]

2. Equity buyers are rushing in on the news

Hopefully inflation has been tamed?

Maybe a rate cut is in the offing?

Or maybe a recession?

[Fiendish Thingy]

4. Rate cut unlikely

Recession by the end of the year a near certainty.

[wolfie001]

8. The empty ports are all the evidence I need

We're in for some rough roads. Buckle up.

[Fiendish Thingy]

3. It's not going to last

Hundreds of thousands have or will soon lose their jobs, and inflation will be on the uptick by the next report.

[FredGarvin]

5. That depends on whether the tariffs will be in place by then

Trump is gonna flip flop again IMO

[Fiendish Thingy]

6. If he flip flops, that will lessen the damage

But some of the damage has already been done, and will persist even if the tariffs are lifted (and not all of them will be lifted, in any case)

[mdbl]

7. It's all market manipulation bullsh!t

Just when the tariffs are supposed to hit the hardest he'll back off but this little show was a great way to get people to spend for the last couple of months wasn't it? He's such a F'ing genious. Actually, it's just the american public is that F'ing dumb.