Gasoline Still a Tiny Sliver of Consumer Spending

The Fed’s targeted inflation gauge for April hit the wires Thursday, and boy did it give folks the heebie-jeebies. Headlines hyped the Personal Consumption Expenditures (PCE) price index’s jump to 3.8% y/y from 3.5% in March and 2.9% in February, warning it signaled high oil and gas prices’ economic risks.[i] If inflation itself didn’t knock growth (and presumably stocks), then potential Fed rate hikes would, some argued. Yet the other half of this report—the consumer spending side—shows this is a false fear, a brick in stocks’ wall of worry. Read Full Article »