By Jessica Coacci
The Fed's preferred gauge of monthly price increases grew at a slower pace in April but still remained above its preferred target rate, the Commerce Department said Thursday.
The personal-consumption expenditures price index climbed by 0.4% in April from the previous month, after rising by 0.7% in March, the Commerce Department said. Excluding the volatile food and energy categories, core PCE prices rose by 0.2%.
Over the past year, the PCE price index is up by 3.8%, still above the 2% target rate for the Fed. The core 12-month PCE inflation rate is 3.3%.
The PCE reading is often close to expectations because economists can use other official data published earlier in the month to forecast the reading with great accuracy. Nevertheless, a series of supply shocks that have hit the U.S. economy over the past several years has left policymakers in a more complex scenario of combating higher inflation without stunting broader economic growth.
Among one of those salient supply shocks is the recent surge in global energy prices. Higher gasoline prices have soured household sentiment to record lows as consumers face levels of price increases not seen in nearly three years.
While textbook monetary policy advocates for looking through oil price supply shocks, some officials at the central bank have increasingly become more hawkish as they work toward their inflation goals. New Fed chairman Kevin Warsh takes on a more challenging endeavor to set interest rates at a level that President Trump prefers to be lowered, while inflation readings have been higher than their desired measure since 2021.
The Commerce Department's Thursday report also showed that consumer spending rose by 0.5% last month. That was inline with what economists polled by The Wall Street Journal expected.
Personal income was unchanged, compared with the 0.4% forecast.
Write to Jessica Coacci at jessica.coacci@wsj.com
(END) Dow Jones Newswires
05-28-26 0905ET
