27 October 2023
The Fed’s touted inflation indicator, Core PCE Deflator, marginally improved to 3.7% YoY in September. However, on a monthly basis, it saw its most significant increase in four months. Despite slowing annual inflation figures, the data indicates inflationary pressures persist, driven by services and energy prices. Notably, while personal consumption surged, incomes lagged, resulting in private workers seeing a wage decline. Government workers, on the other hand, experienced a wage hike nearing record levels. The personal savings rate, having been adjusted multiple times, plummeted further, reaching near historic lows. This raises questions about the effectiveness of current economic policies.