The Fed’s preferred indicator shows that inflation rose 4.9% in April, signaling that price increases could be slowing.

People shop at a supermarket in Washington, DC, on May 26, 2022, as Americans prepare for the shock of summer stickers as inflation continues to rise.

Nicholas Kamm | AFP | Getty Images

The Federal Reserve’s preferred inflation indicator rose 4.9% in April from a year ago, a level that is still high, however, indicating that pressures could ease slightly, the Department said on Friday. of Commerce.

This increase in the base price index of personal consumption expenditure was in line with expectations and reflected a slowdown from 5.2% reported in March. The figure excludes volatile food and energy prices that have mainly contributed to inflation for up to 40 years.

The 0.3% monthly increase was the same as in March and in line with Dow Jones estimates.

Including food and energy, the overall PCE rose 6.3% in April from a year ago. This also slowed down from 6.6% in the previous month. However, the monthly variation showed a more marked decline, with an increase of only 0.2% compared to the increase of 0.9% in March.

Inflation in recent months has been moving at a rate not seen since the early 1980s. The inability of supply to keep up with demand has pushed up prices, fueled by an unprecedented fiscal stimulus during the Covid pandemic, the obstruction of global supply chains and the war in Ukraine. has led to rising energy prices and has led to fears of food shortages.

In response to price pressures, the Fed has implemented two interest rate hikes for a total of 75 basis points and has indicated that there will likely be a series of rises until inflation approaches the target of 2% of the central bank.

The PCE figures reported on Friday are lower than the consumer price index used by the Bureau of Labor Statistics. The general CPI for April rose by 8.3% over last year.

The two numbers differ in that the CPI tracks consumer data while the PCE is extracted from companies. The Fed considers the PCE to be a broader measure of what is happening with prices at various levels.

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