Rising incomes and slowing inflation in the US support the markets
February 29, 2024 @ 18:55 +03:00
This week, the markets were mostly looking forward to the release of the US personal income and spending data, with a focus on the accompanying price index. The Personal Expenditure Price Index, excluding food and energy, rose 0.4% m/m and slowed from 2.9% y/y to 2.8% in January, in line with expectations.
![](https://fxpro.news/wp-content/uploads/2024/02/us_pce_240229.png)
A 1% rise in personal income came as a surprise, against expectations for a 0.4% rise. However, personal disposable income rose by 0.3% m/m, which did not break the trend of recent months.
![](https://fxpro.news/wp-content/uploads/2024/02/us_income-outlays_240229.png)
At the same time, there was no acceleration in spending, which rose by 0.3% m/m. They rose by 5.2% y/y, against a 4.8% rise in total income and a 4.5% rise in disposable income. A worrying result – the savings rate of 3.6% is about half the pre-pandemic level. But the good news for markets is that this won’t cause inflation to accelerate, meaning the Fed won’t have to fight it and delay policy easing.
![](https://fxpro.news/wp-content/uploads/2024/02/us_savings-to-income_240229.png)
In the wake of this report, gold is storming through the resistance of the downward channel, and the Nasdaq100 and S&P500 indices are testing all-time highs again.
The FxPro Analyst Team