The increase in prices moderated in the United States in April, according to the inflation index preferred by the Federal Reserve, the PCE published this Friday, although household spending continued to rise hand in hand with rising income.
Inflation in the last 12 months through April was 6.3%, compared to 6.6% in March, according to the Commerce Department’s PCE index. On a month-over-month basis, prices increased a modest 0.2% between March and April, compared to 0.9% between February and March.
This is good news for consumers, who saw their income rise 0.4% last month compared to March, and they spent 0.9% more, a figure that – although positive – represents a smaller increase than that registered in the third month of the year.
The data shows that “consumers are resilient, for now,” summed up Rubeela Farooqi of High Frequency Economics.
The world’s largest economy has been battered for months by persistent inflation, made even more painful by rising energy prices as a result of Russia’s invasion of Ukraine.
Precisely, if the most volatile energy and food prices are excluded, the so-called “core” inflation marks 4.9% in 12 months.
The PCE is the inflation measurement index preferred by the US central bank, which advances an aggressive policy of raising interest rates, in an attempt to moderate the rise in prices and direct it to its objective of 2% per year.
The process of raising rates began in March after years of ultra-low interest rates, close to zero, to prop up the economy during the pandemic. In May the Fed raised benchmark rates by half a percentage point, the biggest increase since 2000.