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This week’s significant economic reports were the Gross Domestic Product (GDP) revision for the third quarter and the Personal Consumption Index (PCE) for August. The PCE, as readers of my blog know, is the FED’s favorite inflation gauge.

The GDP number was unrevised from the last revision and showed the economy expanded at a 3% annual pace in the third quarter. Recession? What recession? We shall see. With credit card debt at a record level of over $1 trillion (yes trillion), looming commercial loan defaults, and the not too long-ago employment number being revised down by over 800,000 jobs is the 3% GDP number all rainbows and unicorns?

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This morning’s all PCE number was up .1% from August and up 2.2% in the last year which is the lowest reading since February 2021. Core PCE which strips out food and energy came in at 2.7% higher than July’s 2.6%. As the group Oasis sang in one of their songs, “Why why why why” I ask why is the FED lowering interest rates when their favorite inflation gauge continues to be above 2%? The FED’s mandate is for price stability and full employment. I read that the FED’s focus is now more on the softening labor market. Recession? Hmmm.

Gold down a few dollars and silver up a few cents this morning while the stock indices continue their upward move. The Trump effect! Buy any dip or buy the momentum.

Until next time…

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