Inflation is Still High, but Inflation is Still Here!
The Fed’s go-to measure rose 4.9% in April in a sign that price increases could be slowing...
The Fed’s favorite inflation gauge rose 4.9% in April from a year ago. Even with the number dropping but still be high, it gives hopes for ease. The core personal consumption expenditures price index in line with expectations and even reflected a good slowing pace from the 5.2% reported in March.
This number excludes food and energy prices which have been a major contribution to inflation. The 0.3% increase month-to-month was the same reported in March and in line with Wall Street estimates.
Add the inflation giants of food and energy and the PCE increased by 6.3% in April from last year which is also a decline from the 6.6% last month. Month-to-month change showed just an increase of 0.2% compared to 0.9% in March.
“Consumers remained undaunted by inflation last month, strongly increasing spending and changing their mix to more services such as at bars and restaurants, and travel and recreation as the weather warms. The spending was fueled in part by higher wages, and also by Americans drawing more money out of savings, which is a giant stockpile of at least $2 trillion.”
Robert Frick, corporate economist at Navy Federal Credit Union, as he stated the data concludes people are spending, but are also using spendings to do so.
The BEA has also reported that personal income rose 0.4% during the month. Consumer spending held up which rose to beat estimates at 0.9%. Income after taxes and other charges was flat for the month after falling 0.5% in March.
President Biden stated that the numbers from April show “a sign of progress, even as we have more work to do.”