We knew from the FOMC statement on Thursday that US core inflation is no longer elevated. Yesterday's PCE data provided confirmation. From Reuters:
The Commerce Department's "core" personal consumption expenditures price index, which removes food and energy costs, rose 1.9 percent in May from a year earlier for its smallest annual rise since March 2004.
On a month-to-month basis, overall prices rose a stiff 0.5 percent in May, but core prices edged up just 0.1 percent.
Consumer spending kept pace with overall inflation but income lagged.
The Commerce Department report also showed consumers boosted spending in May by 0.5 percent for the second straight month. That was less than Wall Street had expected and hinted that more sedate spending habits may keep a lid on prices. Incomes rose by 0.4 percent, also less than expected.
The Reuters/University of Michigan survey showed a final June reading of 85.3 reading, below 88.3 in May and its lowest since August 2006...
At least manufacturing's recovery appears to be sustained.
The National Association of Purchasing Management-Chicago business barometer came in at 60.2 in June, down from 61.7 in May but above economists' forecasts of 58.0. A reading above 50 indicates expansion.
Elsewhere, Europe's economy still appears to be in relatively good shape. From Bloomberg:
An index of sentiment among executives and consumers in the euro region eased to 111.7 this month from a revised 112.1 in May, the European Commission in Brussels said today. Inflation stayed at 1.9 percent, according to a separate report.
And the UK economy grew 0.7 percent in the first quarter, but leaving the saving rate at a 47-year low.