US: Chicago PMI, PCE inflation and Personal income and spending in focus - TDS

In view of analysts at TDS, US personal income and spending for July will take a backseat to inflation developments though they see little room for optimism on that front.

Key Quotes

“TD looks for headline PCE inflation to remain unchanged at 1.4% y/y, reflecting a subdued 0.1% increase on the month—both in line with consensus. Food prices should make a positive contribution but will be offset by a drag from energy, resulting in another on-consensus 0.1% m/m print for the core index.”

“Core PCE inflation should also remain stable at 1.5% y/y, which is slightly above market estimates after rounding. Personal incomes should rise by 0.4% m/m (market: 0.3%) while we expect personal spending to post a similar but on-consensus 0.4% advance.”

“Chicago PMI for August will be released at 9:45 ET and markets expect a modest dip to 58.5. Rounding out the calendar are initial jobless claims for the week of August 26 (market: 238k) and pending home sales for July (market: 0.4% m/m).”