Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge shows

[00:00:00] Speaker 1: Rick Santelli standing by at the CME in Chicago. The numbers, Rick. Great to see you. Yeah, numbers with an S. Listen, folks, buckle up. This is going to be a lot of numbers. And let's start out with initial and continuing claims, shall we? They seem to be populating first. On initial claims, 225,000 expected, 215,000. Nice drop. Last month, revised subtle revision, 226,000 to 227,000. If we look at continuing claims, almost spot on. Comes out at 1,821,000. That's a slightly higher number than our last look, which ends up getting revised to sit right on 1.8 million, which means now that we've had two numbers over or equal to 1.8 million after a stretch underneath, still well behaved historically. Initial claims coming back down, continuing claims hovering, but both in well-contained territory. All right. Personal income for the month of May, almost twice expectations. Comes out up 7 tenths. Strongest number since January of 24 equals where we were about a year ago in July. If we look at spending, similar scenario, up 7 tenths. Better than expected, but we were looking for 6 tenths, so not quite double like we were on income. 7 tenths would be the best going back to, well, it equals where we were in February. And if you look at the March number, it was up 1%. So that is your kind of cluster there. If you look at real spending, accounting for inflation, still comes out better than expected. Up 3 tenths. Now let's get to the pricing indices. If you look at PCE price on a month over month, it moderated from expectations. It's up 4 tenths, exactly equal to our last look. Year over year is 4.1, exactly as expected. And definitely a little bit warmer than the 3.8 in the rearview mirror. And 4.1, well, 4.1 would be the warmest since April of 23. Now let's look at core month over month, up 3 tenths as expected. And it equals last month, which was revised up to 3 tenths. Year over year, core PCE, in my opinion, the most important number expected at 3.4, comes out at 3.4, following a 3.3. And 3.4 would be the warmest going back to October of 23. Now, let's do the GDP numbers. Third time around the block, I wouldn't suspect there'd be big surprises, but you never know. The number is 2.1, and it does increase because we're at 1.6. So 2.1 versus 1.6, how does that peg? Well, that would be the best quarter since the third quarter, 25 at 4.4. If we look at the GDP consumption, personal consumption, it really gets cut here dramatically. Our last look was 1.4 on the second look. This is the third look, up half of 1%. I am really shocked by that. Up half of 1% would be the weakest going back to the first quarter of 22 when it was up 4 tenths. Now let's get into the pricing on GDP. If we look at GDP price index, comes out 3.6, one tenths hotter than we were looking for. If you look at the core, 4.4 are wild. That's what we were expecting. That's what it arrived at. And that was our last look. What do we have left? Durable goods. Durable goods. Now this is a May preliminary order. In a couple weeks, we'll have a revision. We'll pencil in a little sharper. We were looking for a number that was going to be negative, minus 5%. And it comes out better, but still negative, minus 4.5%. That would be the weakest since, well, about a year ago, June of 24 at minus 9.4. But one of the reasons for this, of course, is it's been running pretty decent. Durable goods, of course, last month was 8%. It gets revised up to 8.5%. So there's a little mean reversion going on here. If we look at X transportation, this really explains the number completely and why we're expecting negative. It now goes from minus 4.5 up to 1.3. So obviously, we see that transportation aircraft was the reason we pulled that number down. There's a lot of moving parts there to get involved with a lot of issues over the border and sales. If we look at X transportation, 1.3, that would be the strongest. This is a really good number. You have to go back to about three years, June of 23, to find a better number. Now if we look at capital good orders, non-defense X air, 1.6. Wow. 1.6 is huge. This has been running on the hot side. This is a proxy for capital spending. And if you look at the number here, 1.6, that would be the strongest since it was 3.8. And the 3.8 was in March of this year. And that was the strongest going all the way back to June of 2020. So not many numbers this lofty. And finally, a drumroll please, shipments. Shipments up three-tenths following an up five-tenths number. Now after all that, interest rates continue to move down, but they're moving down faster and short maturities. So there's this yield curve movement you want to pay attention to. And the pre-opening equities, well, they're holding on to their green in the NASDAQ. And we did see a little deeper shade of green, now up 130 points in Dow futures. Andrew, back to you.