A key inflation indicator rose 3.1% faster than expected in April as price pressures mounted in the fast-growing US economy, the Department of Commerce reported on Friday.
The core personal consumption expenditure index should rise 2.9%. Federal Reserve officials consider the measure to be the best measure of inflation, despite observing a number of metrics.
Under its price stability mandate, the Fed considers 2% healthy, although it has pledged to keep the average higher than usual in the interests of promoting full employment.
The index tracks price movements in a wide variety of goods and services and is generally considered to be a more comprehensive measure of inflation because it tracks changes in consumer behavior and has a broader scope than the Department of Labor’s consumer price index. The CPI rose 4.2% in April.
Last month, core PCE rose 0.7%, also faster than the expected 0.6%.
Including volatile food and energy prices, the PCE benchmark index rose 3.6% year-on-year and 0.6% compared with March.
This rise in inflation was accompanied by a sharp slowdown in personal income, which fell by 13.1%. But that was actually less than the 14% estimate. Personal income was up 20.9% in March after the last round of government economic reviews.
Despite the sharp decline in personal income, the savings rate remained high at 14.9%. Consumer spending is estimated to have increased by 0.5%.
Disposable personal income after taxes and other withholding taxes fell 14.6%.
This is the latest news. Please try again here for updates.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up today to start a free trial.
