Fed's Preferred Inflation Gauge Rises 2.6% In June

The Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve’s preferred gauge of inflation, rose 2.6% in June.

According to data from the Commerce Department, core PCE, which excludes food and energy, increased 2.8% from one year ago. It rose 0.3% over the previous month, higher than the 0.2% increase seen in May.

Both the PCE and core PCE figures were higher than analyst forecasts, according to a Morningstar report.

Consumer spending, adjusted for inflation, rose 0.3% in June, compared to a 0.3% decline in May. Personal income also saw an uptick in June, rising 0.3%, after falling 0.4% in May.

In absolute terms, personal income increased $71.4 billion in June, while disposable personal income rose $61 billion. Personal consumption expenditures increased $69.9 billion, while personal outlays increased $69.5 billion during the month.

Personal savings stood at $1.01 trillion in June, while the personal saving rate was 4.5%.

This comes after the Federal Reserve decided to keep interest rates unchanged on Wednesday.

The Federal Open Market Committee (FOMC) said that recent indicators point to a moderation in the growth of economic activity in the first half of the year.

“The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” it said.

U.S. equities surged in Thursday’s pre-market trading session, as earnings of big technology companies fueled optimism among investors.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.92%, while the Invesco QQQ Trust (QQQ) rose 1.38%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘extremely bullish’ territory.

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Also See: Dow Futures Rise As Big Tech Earnings Boost Investor Optimism: MSFT, META, F, AAPL, AMZN, CVNA Among Stocks To Watch