INSTANT VIEW-U.S. Feb PCE, jobless claims
NEW YORK, March 31 (Reuters) - U.S. consumer spending rose
0.5 percent in February as expected, government data showed on
Thursday, while a key gauge of inflation was up slightly more
than forecast.
The Commerce Department said the price index for consumer
expenditure, a measure of inflation favored by Federal Reserve
Chairman Alan Greenspan, climbed 0.3 percent after rising 0.2
percent in January. A Reuters poll of analysts had expected the
PCE price index to show another 0.2 percent rise.
Story: [nN30187301] Table: [nWAK000607]
KEY POINTS:
- Personal income gained 0.3 percent in February. Analysts had
predicted personal income would gain 0.4 percent after it
slumped 2.5 percent in January.
- U.S. jobless claims rose to 350,000 in the week ended March
26, up from a revised 330,000 in the previous week, the Labor
Department said. Wall Street economists had forecast a drop to
320,000.
Story: [nN31242565] Table: [nOAT000445]
COMMENTARY:
PATRICK FEARON, SENIOR ECONOMIST, A.G. EDWARDS AND SONS, ST.
LOUIS, MISSOURI
"The 0.2 percent rise in the core personal consumption
expenditure (PCE) price index along with the year-over-year
increase of 1.6 percent is a calming influence on the bond
market. Even though the Fed has raised some concern about
rising inflation, inflation so far has not gotten out of hand.
Jobless claims were up significantly up to 350,000 but due to
seasonal revisions, it was possible that we would get a number
that was higher than forecast."
MARKET REACTION:
- U.S. Treasury debt prices rally on relief as core PCE holds
at 1.6 percent, jobless claims jump. The benchmark 10-year
Treasury note was up 8/32 to yield 4.52 percent.
- The euro <EUR=> initially gains 8 pips against the dollar,
trading at $1.2962 soon after the PCE report from about $1.2954
shortly prior. The dollar fell against the yen, trading at
about 106.84 yen <JPY=> from about 106.90 yen shortly prior.
- U.S. rate futures jump; jobless claims jump balances higher
PCE index.
LINKS:
- U.S. Feb. core PCE poll story: [nN2914000]
- For personal income data, the Web site is:
http://www.bea.doc.gov/bea/dn/home/personalincome.htm
- For weekly jobless claims data, the Web site is:
http://www.dol.gov/
((Reporting by New York Treasuries Desk; 1-646 223-6300))