PCE Numbers In-Line, Pre-Market Fighting Off Lows

Economic Overview - Pre-market futures are improving following the release of major economic numbers, despite a drawback in EU markets due to rising unemployment and inflation in Germany [1] - U.S. indexes are experiencing volatility, with the small-cap Russell 2000 showing gains while other major indexes remain in the red [1] PCE and Inflation Metrics - July Personal Consumption Expenditures (PCE) figures were in-line with expectations, indicating no hindrance to the anticipated 25 basis point rate cut for the September Fed meeting [2] - Personal Income for July increased by 0.4%, the strongest since April, while Personal Spending rose by 0.5%, marking the highest increase since March [3] - The headline PCE Index showed a month-over-month increase of 0.2%, the lowest since May, with a year-over-year increase of 2.6%, consistent with the previous month [4] - Core PCE, excluding food and energy, increased by 0.3% month-over-month and 2.9% year-over-year, indicating stability in inflation metrics [5] Employment and Economic Indicators - Fed Chair Jerome Powell's focus has shifted from inflation to employment concerns, with July's non-farm payrolls showing an increase of 73K, which is below the previous four-month average of 54K [8] - A significant upward revision in PCE would be necessary to alter the current outlook, as weakening employment is influencing the decision for a rate cut [9] Trade and Inventory Data - Advanced Trade in Goods for July reported a deficit of $103 billion, which was more than $10 billion lower than anticipated [10] - Advanced Retail Inventories and Wholesale Inventories both reported a month-over-month increase of 0.2%, indicating stable inventory levels [11] Market Expectations - The upcoming week will feature new jobs reports, including July JOLTS numbers and private-sector payrolls from ADP, leading up to the significant BLS non-farm payrolls report [12]