February 2017 US PCE 2.1% vs 2.1% exp y/y

• Prior 1.9%
• Core PCE 1.8% vs 1.7% exp. Revised to 1.8%
• Personal income 0.4% vs 0.4% exp m/m. Prior 0.4%. Revised to 0.5%
• Spending 0.1% vs 0.2% exp m/m. Prior 0.2%
• Real spending -0.1% vs 0.1%  exp m/m. Prior -0.3%. Revised to -0.2%

Strong on the inflation gauges, soft on the spending. Disposable income rises 0.3% vs 0.4% in Jan but wages rise 0.5% vs 0.4% prior.

Spending is the smallest gain for 6 months. The inflation picture in the US is looking more robust that it is in Europe but the effects will be the same, and higher prices leads to a squeeze on spending. Wages gains could be better but their running ahead of inflation so there may be some wiggle room before we see any real squeeze.