OAN’s James Meyers
8:35 AM – Friday, April 26, 2024
According to the latest March report, inflation increased last month, with a key barometer the Federal Reserve watches closely showing that price pressures continue to increase.
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The personal expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, rose 0.3 percent in March and 2.7 percent over the past year.
Additionally, the slight bump in inflation came as consumer spending rose 0.8 percent in March, 0.5 percent when adjusted for inflation for the second month in a row.
According to the March inflation report, it will likely keep the Fed on track to maintain its baseline interest rate range of 5.25 percent to 5.5 percent at its policy meeting next week.
Consumers showed they are still spending despite the increased price level. Personal spending grew 0.8% for the month of March , which was higher than the projected 0.7% estimate. Personal income increased 0.5%, in line with expectations and higher than the 0.3% increase last February.
Furthermore, the personal savings rate fell to 3.2%, down 0.4 percentage point from February and 2 full percentage points from a year ago as households have taken out savings to stay even keel.
Meanwhile, the Federal Reserve has been targeting 2% inflation, which is a level that core PCE has been above for the last three years.
With the U.S. economy continuing to falter during the first quarter, that will be unlikely to move the Fed toward cooling rates with inflation still 0.7 percentage points above their annual target.
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