In April, the Fed’s preferred inflation index increased by 4.9%, indicating that price increases could be slowing

May 30, 2022

The Fed’s preferred inflation barometer, the core personal consumption expenditures price index, climbed 4.9 percent from a year ago in April, matching expectations and slowing from March.

Personal income increased somewhat less than predicted, while consumer spending exceeded expectations as they drew on their reserves.

The headline PCE increased by only 0.2 percent, a significant decrease from the 0.9 percent growth in March.

According to the Commerce Department, the Federal Reserve’s preferred inflation index jumped 4.9 percent in April from a year ago, a still-high number that indicated that pricing pressures may be lessening a little.

The increase in the core personal consumption expenditures price index was in line with predictions, though it was less than the 5.2 percent seen in March. Food and energy prices, which have been a key contributor to inflation, which is around a 40-year high, are not included in the figure.

On a monthly basis, the 0.3 percent growth was the same as in March. A drop in energy prices in April hindered the monthly gain, although that trend has since reversed.

In April, headline PCE climbed 6.3 percent year over year, excluding food and energy. This was also a slowdown from the previous month’s 6.6 percent growth rate. The monthly change, on the other hand, showed a more pronounced retraction, with an increase of only 0.2 percent compared to the 0.9 percent increase in March.

Source: CNBC
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