US: Core PCE likely increased 0.1% m/m in November – Danske Bank

Analysts at Danske Bank suggest that in the US, PCE figures for November are due and as CPI numbers (usually a good predictor of PCE) for November were weaker than expected and based on CPI, they estimate PCE core increased 0.1% m/m (1.5% y/y versus 1.4% in October, although October was very close to 1.5% y/y) and PCE headline increased 0.3% m/m (1.8% y/y versus 1.6% y/y in October).

Key Quotes

“The difference between the monthly increase in core and headline PCE is driven by increasing energy prices. However, with yesterday's slighter weaker than expected Q3 core PCE released with the Q3 GDP, there's downside risk to our call.”

“Also, in the US, we are due to get core capex orders for November. Capex orders gained strong momentum in the autumn and regional capex plans suggest this trend will continue. The average of the regional capex plans is at its highest level since February 2007, indicating continued tailwinds for core capex orders in coming months.”