One of the US Fed’s favoured measures of inflation is the change in core personal consumption expenditures (PCE). The core version of consumer spending strips out energy and food components, which are volatile from month to month, in an attempt to identify the prevailing trend. It’s not the only measure of inflation used; the Fed also tracks the Consumer Price Index (CPI) and Producer Price Index (PPI) from the Department of Labor.
The latest PCE figures have been published by the Bureau of Economic Analysis as part of the April figures for personal income and expenditures report. At 0.2% for the month, core PCE inflation was the same as March’s figure but more than the +0.1% which was expected.
On an annual basis, growth of core PCE recorded 1.8% as expected and the same as March’s comparable figure of 1.8% after revisions. Annual core PCE inflation had moved above 1.6% in March after ranging between 1.3% and 1.6% for the previous twelve months. April’s result is the second consecutive month in which the annual rate has remained above the top of this range.
