Annual PCE - Feds preferred Inflation indicator fell to 2.6% annually - the lowest in 33 months

12.22.23

The annual PCE inflation rate in the US cooled to 2.6% in November 2023, the lowest since February 2021, down from 2.9% MoM, and below forecasts of 2.8%.

Compared to the previous month, the personal consumption expenditure fell 0.1%, the first decline since July 2022 and compared to 0% in October.

Meanwhile, monthly core PCE inflation which excludes food and energy and is preferred Fed inflation measure, was steady at 0.1%, after a downwardly revised reading in October. Finally, the annual core inflation rate slowed to 3.2% from 3.4%, a fresh low since mid-2021.

PCE inflation is the Fed's preferred inflation metric, and November figures showed inflationary pressures continue to moderate.

Perhaps recession was avoided after all, Who could have known.

The SP500 is literally at ATH, the Dow is 3% above ATH and the NASDAQ is still 12% below ATH, but probably not for long.

Obviously, the markets viewed the inflation cooling signs in 2023 as indication of ... Cooling Inflation, Recession avoidance, even though the Federal reserve was focused on raising Interest rates to reduce any risk of recession.