U.S. PCE price index cools in March; Consumer spending remains flat
2023.04.28 13:20
© Reuters.
Investing.com — A measure of inflation closely watched by the Federal Reserve slowed on a monthly basis in March, as the U.S. central bank is widely tipped to raise interest rates by a quarter percentage point at its next policy .
The price index moved higher by 0.1% during the month, down from the 0.3% registered in February and estimated by economists. , the number slowed to 4.2% from 5.1%.
like food and energy, the PCE index increased by 0.3% in March, in line with the prior month and meeting economists’ projections, according to Commerce Department data on Friday.
On a year-on-year basis, the core moved down to 4.6% from an upwardly revised mark of 4.7% in February, but topped estimates of 4.5%. The Fed uses the PCE price indexes, which gauge how much consumers are paying for goods and services, for its 2% inflation target.
The Fed has raised interest rates at an unprecedented clip over the past year in a bid to corral runaway inflation.
The stubbornly elevated prices and higher borrowing costs weighed on U.S. consumer spending last month, with inflation-adjusted stalling month-on-month after a downwardly revised 0.2% drop in February. Consumer spending makes up over two-thirds of all U.S. economic activity.
Meanwhile, growth in the world’s largest economy decelerated by more than anticipated to 1.1% in the first quarter, in a sign that the spike in rates may be starting to impact output.
