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

Summary

Rick Santelli recaps a barrage of May economic data, including jobless claims, income/spending, PCE inflation, GDP revision, and durable goods. He highlights a huge jump in nondefense capital goods orders, sticky core PCE at 3.4%, a sharp downward revision to consumer spending in GDP, and declining short-term rates steepening the yield curve.

• Initial claims 225k vs 215k exp; continuing claims 1.821M, both contained.
• Personal income up 0.7% (best since Jan 2024), spending up 0.7%.
• Core PCE year-over-year 3.4% as expected, warmest since Oct 2023.
• GDP third estimate rose to 2.1% from 1.6%, but consumption slashed to 0.5%.
• Durable goods orders -4.5% vs -5% expected; ex-transportation +1.3%.
• Nondefense capital goods orders ex-air jumped 1.6%, strongest since March 2024, signaling robust capex.
• Short-end rates falling faster, yield curve steepening noteworthy.
• Equities indicated higher in pre-market.