PCE Inflation Maintains 2.7% Annual Growth in April – BEA By Investing.com
Investing.com — The Bureau of Economic Analysis has reported that the Personal Consumption Expenditures (PCE) price index in the United States maintained a 2.7% annual growth rate in April, consistent with expectations. This key indicator of inflation remained unchanged from the previous month, indicating persistent price pressures in the economy.
In April, the year-on-year PCE price index, excluding volatile items like food and fuel, also held steady at 2.8%, mirroring the figures from March. However, there was a slight deviation from expectations in the month-on-month data, with the headline release showing a 0.3% increase, in line with the previous month, while the core monthly figure rose by 0.2%, falling short of the anticipated 0.3% growth.
These latest numbers may offer some reassurance to the markets, which had been bracing for a prolonged period of elevated interest rates following the recent Federal Reserve minutes. Policymakers had expressed concerns about the sustainability of the downward trend in inflation towards the target level of 2%.
The data on PCE inflation comes on the heels of a downward revision in U.S. economic growth for the first quarter, adding to the uncertainty surrounding the timing of potential interest rate cuts by the Federal Reserve from historic highs. These developments underscore the delicate balance that policymakers must strike in managing inflationary pressures and economic growth in the months ahead.