US core PCE inflation hits 3.3% in April, matching forecasts and showing sticky prices
The Personal Consumption Expenditures price index rose 3.3% from a year earlier in April, in line with economists' forecasts, the Commerce Department said. Headline PCE matched expectations at 2.5%, while consumer spending growth slowed, complicating the Federal Reserve's policy debate.
The Personal Consumption Expenditures price index, the inflation gauge most closely watched by the Federal Reserve, rose 3.3% from a year earlier in core terms in April, matching the consensus forecast from Dow Jones-polled economists. On a monthly basis, core PCE advanced 0.2%. Headline PCE came in at 2.5% year on year, keeping the measure above the central bank's 2% objective.
The data suggested that services inflation in particular remained sticky, according to CNBC reporting. Growth in personal spending slowed to 0.1% in April from the prior month, while personal income increased 0.2%. The personal savings rate edged down to 4.3%. The combination of moderating consumer activity and still-elevated price growth complicates the Federal Reserve's debate over when to begin cutting interest rates. Chicago Fed President Austan Goolsbee has separately said that energy-driven price pressures are proving more persistent than expected.
Markets reacted with a modest decline in Treasury yields after the release. Wall Street strategists quoted by CNBC said the Federal Open Market Committee may need to move toward a neutral policy rate at either its September or December meeting. The views in this article are based on the source's reporting and are not investment advice.
More from North America
US general meets Cuban military officials at Guantanamo perimeter
General Francis Donovan met Cuban military officials at the edge of the US Naval Base at Guantanamo Bay, CNBC reported. The contact comes amid growing concerns of a possible US military action against the island and warrants careful framing of intent on both sides.
UAE says OPEC exit was a strategic economic move, not political
The United Arab Emirates said its decision to leave OPEC was a strategic economic choice rather than a political one. Officials told CNBC the move lets the country deploy spare production capacity freely and align output with its energy diversification plans.
Hegseth tells Asian allies China cannot impose hegemony in region
US Defense Secretary Pete Hegseth told Asian allies at the Shangri-La Dialogue in Singapore that China cannot impose hegemony on US partners in the region. The remarks frame Washington's Indo-Pacific posture and request for greater allied 'burden-sharing'.