This bulk of US news came out as expected: the Core PCE Price Index rises to 1.5% y/y and jobless claims at 312K. Month over month Core PCE Price Index rose by 0.2% and continuing claims stand at 2.571 million. Personal spending rose by 0.2%.
The Core PCE Price Index was expected to rise by 0.2% in May, just like in April (before revisions). More importantly, the y/y rise was predicted to edge up from 1.4% to 1.5% this time. This figure became important after Yellen put an emphasis on this and dismissed the rise in Core CPI as “noisy”. Weekly jobless claims carried expectations for standing at 310K after 312K last week (revised to 314K). This figure has been very stable of late. Continuing claims were expected to rise to 2.57 million.
Towards the publication, EUR/USD slid towards 1.3605, GBP/USD remained on high ground around 1.7020 and USD/JPY floated above 101.70. -The dollar is slightly stronger after the release, with EUR/USD slipping under 1.36.
More data: the non-core PCE Price Index rose from 1.6% to 1.8% this time. Personal spending is the only real disappointment, but it is not the most important figure.
Yesterday, the US revised Q1 GDP down to a contraction of 2.9%. This downfall is huge. While it was blamed for bad weather, the magnitude of the squeeze makes a 2% growth rate hard to achieve in 2014.
The figures released now are predicted to affirm the stance that the US economy rebounded in the second quarter. Earlier in the week, we had positive signs from home sales and from consumer confidence.
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