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Quicktake: MS on Personal Income and Spending due Friday

US DATA
MS economists expect March personal income data due Friday 0830ET, gained "+17.5%M following a 7.1%M decline. Incorporating a solid retail sales report, including a 15.1% jump in motor vehicle sales and 13.4% increase in food services, we forecast March personal spending increased +4.1%M vs. -1.0% prior."
  • Together, this lifts the savings rate from 13.6% to 25.1%. Incorporating PPI and CPI inputs, we expect core PCE inflation will rise 0.4% on the month in March (+0.35% unrounded),enough to push the year-over-year rate up to 1.9% (right on the line at 1.86% unrounded), and that also keeps core PCE inflation on pace to hit 2.6%Y in April and May this year. We expect headline PCE inflation will rise 0.50% on the month in March, pushing the year-over-year rate up to 2.3% from 1.6%.

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