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Firm spending and softer inflation boost the US soft landing thesis
This morning’s US macro data is another nice combination that fits the soft landing narrative the market is currently enamoured with. While strongly hinted at in yesterday’s 2Q GDP report, we get confirmation of decent consumer spending in June, but not too hot with real personal spending up 0.4% month-on-month (consensus 0.3%) while May was revised up from 0.0 to 0.1%. Yet at the same time, the inflation metrics are softer with the core personal consumer expenditure deflator – a broader measure of inflation than CPI - confirmed at 0.2% month-on-month/4.1% year-on-year. This is down from 4.6% YoY and is lower ... (full story)