inflation in the United States which had been slowing down, rose in April, both year-on-year and month-on-month, according to the PCE index released Friday by the Commerce Department.
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Compared to April 2022, prices increased 4.4%, compared to 4.2% the previous month.
In one month, inflation reached 0.4%, also accelerating compared to March when it was 0.1%. The April rate was higher than the 0.3% expected by the consensus on the MarketWatch website.
The prices of services rose more than those of goods. The increase in food was practically stable but those of energy rose a lot.
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core inflationwhich excludes food and energy prices and is the data most closely watched by the Federal Reserve (Fed, central bank), it also accelerated, to 0.4% in one month and 4.7% in one year.
The PCE index is preferred by the Fed to measure inflation, which it wants to drive towards the 2% annual target.
The CPI index, used especially to calculate pensions, it slowed down in April to an annual rate of 4.9% but in one month it grew to 0.4%. The Commerce Department also reported that household income increased 0.4%, against 0.3% in March.
Spending rebounded strongly: +0.8% compared to +0.1% in the previous month. To curb inflation, the Fed has been raising its interest rates since March 2022 and they are now in a range between 5.00% and 5.25%.
That causes banks to increase the cost of lending to homes and businesses, in order to ease pressure on prices.
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The Fed’s next monetary policy meeting is scheduled for June 13-14.
The Bank members are torn between raising rates for the 11th time in a row or going on hiatus and avoid slowing down economic activity too much.
AFP
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