Uptick in PCE but downtick in Jobless claims


The dollar edged higher after the mix of data, where income and spending were in line with forecasts, and jobless claims were lower than expected. USDJPY perked up a few points to 106.55, as EURUSD dipped to 1.2306. 

Personal income remained healthy, though a drop in spending helped boost the savings rate and initial jobless claims sank again.U.S. initial jobless claims fell 12k to 215k in the week ended March 24 after rising 1k to 227k (revised from 229k) in the March 17 week. This is now the lowest level since January 1973. And it brings the 4-week moving average down to 224.5k from 225.00k (revised from 223.75k). Continuing claims rose 35k to 1,871k in the March 17 week after dropping 41k to 1,836k previously (revised from 1,828k). Meanwhile, US February personal income rose 0.4%, with spending up 0.2%, the same as in January. The PCE chain price index, the Fed’s preferred measure, increased 0.2% after the 0.4% January jump, with the core rate up 0.2% from 0.3% previously. On a 12-month basis, the headline PCE price index rose to a 1.8% y/y pace from 1.7% y/y, with the core rate at 1.6% y/y from 1.5% y/y. Though the price measured moved up, they remain below the Fed’s 2.0% target, yet they could give policymakers confidence inflation is moving higher.

Remaining on the docket are Chicago PMI and final U. Michigan sentiment.

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Andria Pichidi

Market Analyst


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