| THE TAKEAWAY: [U.S. personal consumption rose for the fifth month in February] > [Increased spending fuels economy, spurs upward inflationary pressures] > [USD strengthens]
U.S. personal consumption expenditure (PCE) rose for the fifth straight month in February. Core PCE climbed by 0.1 percent in February from the previous month, after rising by 0.2 percent in January. On a yearly basis, core PCE rose by 1.9 percent, unchanged from the pace seen in January. These figures were in line with the consensus forecasts of economists surveyed by Bloomberg News.
According to the Bureau of Economic Analysis, personal income rose by $28.2 billion, or 0.2 percent, while disposable personal income (DPI) increased by $18.9 billion, or 0.2 percent, in February. January's personal income estimates were revised downwards to 0.2 percent from 0.3 percent. Meanwhile, personal spending soared by $86.0 billion, or 0.8 percent, notably higher than the 0.4 percent gain seen in the previous month. Economists had called for a 0.4 percent increase in personal income and a 0.6 percent gain in personal spending.
Consumer spending is a key indicator of economic health, and is particularly valuable in forecasting inflationary pressures as it used by the Federal Reserve as a primary gauge of inflation. The stronger spending figures seen in recent months, combined with the improving labor market could support a review by the Fed to increase their benchmark interest rates earlier than late 2014. AUDUSD 1-minute Chart: March 30, 2012
 Immediately after the data release, the greenback fell against most major currencies, but quickly regained its footing to rally higher against its peers. At the time of this report, the dollar had strengthened by 10 pips against the Australian dollar to trade at around $1.0385.
--- Written by Tzu-Wen Chen, DailyFX.com
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained in this email are provided as general market commentary, and do not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The content in this email is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. Dailyfx has taken reasonable measures to ensure the accuracy of the information, however, does not guarantee its accuracy, and will not accept liability for any loss or damage which may arise directly or indirectly from the content or your inability to access the content, for any delay in or failure of the transmission or the receipt of any instruction or notifications sent through this email. Please read the full disclosures here. Additionally, Dailyfx takes your privacy seriously. Please click here to read our privacy policy. |  Related Blog Posts |  Subscribe via RSS *Get live updates in your web browser window. | |
Leave a comment