Core inflation stabilizes, actual income increases
The PCE Price Index was flat for March, in which the core PCE (except food and energy) was also unchanged in the month. On a year-on-year basis, the headline PCE increased by 2.3%, while the core PCE ticks 2.6%. It marks a stagnation under recent inflation pressures and aligns with tone of recent patience of the Federal Reserve. Meanwhile, real disposable income also increased 0.5%, showing that wage benefits are now arranging to offset inflation pressure for now. The increase in compensation was led by private sector services, which contributes $ 46.4 billion, followed by goods-producing industries with $ 11.8 billion.
Pending house sales grow rapidly in March
The housing area showed renewed strength, with a pending house sales index 6.1% month-month climb. The south had profit focused, while the Northeast experienced a decline. According to NAR Chief Economist Lawrence Yun, sensitivity to job growth and mortgage rate change is affecting signs of contract. While not all pending sales stop, increase the market status as stabilizing the market status to fresh purchases for interest.
Market forecasting: neutral for fast
The combination of stable core inflation and strong consumer expenses supports a neutral-and-bullish short-term approach to American equity and bond markets. Flat inflation may relieve pressure to increase rates on the fed, while increasing consumption and housing activity suggests continuous economic expansion. Traders should see the upcoming April CPI and labor data to confirm this trend.
