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US Data 9/29 - Core Inflation, Consumer Spending, Pending Home Sales

In the US session (9/29), we got inflation, personal spending, and home sales data. These were all for August, so they were not the most timely. Nonetheless they add to the overall picture of the US economy.

Core PCE Price Index m/m August: 0.1%
Forecast: 0.0%
Precious: 0.1%
This is an inflation gauge that the FOMC uses when determining monetary policy. It showed a slight tick up in August at 0.1%, which was the print for July as well. On the year, August's price index is 1.5% higher. While this does not spell strong inflation, it should not change the time-line for the Fed's first rate hike, which is around mid-2015.

Personal Spending m/m August: 0.5%
Forecast: 0.5%
Previous: -0.1%
After a slightly negative month in July, spending picked up in August by 0.5%, in-line with average forecasts. Strong spending with positive inflation data should provide grounds for a rate hike in mid-2015. 

Pending Home Sales m/m
August: -1.0%
Forecast: -0.4%
Previous 3.2%

The National Association of Realtors (NAR) reported a -1.0% reading for pending home sales in August. NAR's chief economist, Lawrence Yun is not concerned, attributing the decline first to the variability of the pending home sales data point, and to the fact that there was fewer distressed inventory. This suggests there might be a shift from investor-based buying to more home-ownership buying that will use the traditional mortgage approach. With an increasing rate environment pending, Mr. Yun did note that more inventory is needed to maintain growth in the housing market.