Core PCE
The BEA will make three changes to how it measures price change for portfolio management, computer software and accessories, and legal services in PCE. On net, these changes would likely lower current PCE inflation readings.
Our month-over-month May Core PCE nowcast of 0.40% came in 8 basis points above the realized 0.32% reading. Our error stemmed from Supercore (core services ex-housing) – the realized readings for nowcasts for core goods and housing came right in line with our final nowcasts for
Summary & Discussion Core and Supercore PCE delivered a major downside surprise in the final PCE release for April, but. more than half of the downside surprise was offset by upside revisions to Q1 inflation. The net result was just a 3bp decline in Core PCE year-over-year readings