Key inflation measure eases, suggesting price increases could be slowing
The personal consumption expenditures price index, also known as "the Fed's favorite inflation measure" rose 6.3 percent in April from a year ago, in a sign that inflation might be slightly moderating, CBS and The Associated Press report, per the Commerce Department.
Though still elevated, April's number represents the first slowdown since November 2020, and clocks in just below a four-decade high set in March, CBS and AP write.
Consumer spending also rose a "healthy" 0.9 percent from March to April, "outpacing the month-to-month inflation rate for a fourth straight time," the outlets report. Americans' willingness to spend despite inflation is helping to sustain the economy, though it also threatens to keep prices high.
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"The rise in inflation-adjusted spending in April shows consumers are resilient, for now," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "With inflation still uncomfortably high, the labor market strong and household spending maintaining positive momentum, the Fed will stick with its plan to raise rates by 50 basis points at the next two meetings."
Though the April report showed some progress, "gas will be a factor again when the May numbers come out next month," CNBC notes.
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Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
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