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PCE data is bearish, but don't panic just yet First, a quick note: PCE data is based on the National Income Accounts, making it more accurate than CPI and seasonally adjusted. The Fed's so-called 2% inflation target is actually the annual PCE rate. ┈➤ Overall PCE ◆ Overall PCE monthly rate 0.2%, above expectations (0.1%), above the previous value (-0.1%). ◆ Overall PCE annual rate 3.7%, above expectations (3.6%), same as previous. ◆ The Q2 annualized quarterly rate for overall PCE was revised up from 3.4% to 3.6%. The impact of oil prices on inflation is very clear. ┈➤ Core PCE ◆ Core PCE monthly rate 0.2%, meets expectations, but above previous value (0.1%). ◆ Core PCE annual rate 3.3%, same as previous. ◆ The Q2 annualized quarterly rate for core PCE was revised up from 5.1% to 5.3%. ┈➤ GDP Deflator The Q2 GDP deflator was also revised up from 6.3% to 6.4%. Q1 was 4.4%. ┈➤ Real GDP Q2 real GDP annualized quarterly rate remained unchanged at 1.5%. Q1 was 2.1%. ┈➤ Personal Income and Spending Personal income and spending monthly rates both exceeded expectations; personal spending monthly rate was lower than previous, but personal income was higher than previous, which may affect August's personal consumption. If personal consumption willingness increases, it could also push prices higher. Data as shown in Figure 2.