Core PCE rose 0.2% in April, matching the March pace and the consensus call, with the year-over-year rate at 3.3%. Headline PCE accelerated to 0.4% month over month from the prior reading, lifting the annual rate to 3.8% as food and energy passed through to the index. Personal income was essentially flat, decreasing by less than $0.1 billion at a monthly rate. Nominal personal spending rose 0.5%, but real spending rose only 0.1%, with prices absorbing the rest of the gain. The personal saving rate fell to 2.6%, near the bottom of its post-pandemic range.
The income side is the cleaner story than the price line. Households sustained spending in April by drawing down savings rather than from current earnings. That pattern is bounded by the level of the saving rate itself, which is already low enough to limit how many more months it can absorb a flat income print without a step-down in consumption.
Core at 0.2% keeps the September Fed cut alive on the front of the curve. The Y/Y readings, 3.3% core and 3.8% headline, both sit well above the 2% target and give the Committee no reason to move sooner.