The Personal Income & Outlays report hit this morning. Most people call it the “PCE report” but it’s actually much broader – it tracks income, spending, saving, and inflation all in one release.

Here’s April in a nutshell:

𝗛𝗲𝗮𝗱𝗹𝗶𝗻𝗲 𝗣𝗖𝗘 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻: 3.8% YoY – highest since May 2023
𝗖𝗼𝗿𝗲 𝗣𝗖𝗘 (ex-food & energy): 3.3% YoY
𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝘀𝗮𝘃𝗶𝗻𝗴 𝗿𝗮𝘁𝗲: just 2.6% — disposable income dipped while spending rose

That saving rate is the difference between what people earn and what they spend. At 2.6%, there’s not much cushion left.

𝗕𝗼𝘁𝘁𝗼𝗺 𝗹𝗶𝗻𝗲 𝗳𝗼𝗿 𝗵𝗼𝘂𝘀𝗶𝗻𝗴: until inflation trends back toward 2%, the Fed stays on hold and mortgage rates stay elevated.

Next read: June 25. 📅