The S&P 500 (SPX) opened Friday on higher ground and is less than 1% away from reaching a new all-time high. That comes ahead of September’s delayed Personal Consumption Expenditures (PCE) index, which the Bureau of Economic Analysis will release at 10 a.m. Eastern Time. The index was delayed due to the recent government shutdown.
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At the same time, the University of Michigan will also publish its preliminary Index of Consumer Sentiment for December.
PCE in Focus amid Elevated Layoffs and FOMC
The PCE is the Fed’s preferred gauge of inflation and will provide the central bank with its last measure of prices before the December 9-10 Federal Open Market Committee (FOMC) meeting. The Fed is widely expected to lower rates by 25 bps, with CME’s FedWatch tool pricing in 87.2% odds of the outcome.
Several Fed officials believe that a weakening labor market currently poses larger risks than inflation, supporting the rationale for lower rates. Yesterday, outplacement firm Challenger, Gray & Christmas said that U.S. employers announced 71,321 layoffs in November, marking the highest level for the month since 2022.
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