Fed’s Favored Inflation Gauge Cools, Spending Unexpectedly Drops
- Core PCE price index rose 0.2% in April, smallest gain of year
- Inflation-adjusted spending fell, restrained by tepid services
This article is for subscribers only.
The Federal Reserve’s preferred measure of underlying US inflation moderated in April and consumers dialed back their spending, supporting plans for an eventual reduction in interest rates.
The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 0.2% from the prior month. That marked the smallest advance of the year, according to Bureau of Economic Analysis data out Friday.