The latest figures could provide some tentative reassurance for Fed officials, who aggressively raised interest rates to fight inflation, that price pressures are easing.
WASHINGTON — A price gauge closely tracked by the Federal Reserve cooled slightly last month, a sign that inflation may be easing after running high in thefrom the Commerce Department showed that an index that excludes volatile food and energy costs rose 0.2% from March to April, down from 0.3% in the previous month. It was the mildest such increase so far this year.Measured from 12 months earlier, such so-called “core” prices climbed 2.8% in April, the same as in March.
The Fed tends to favor the inflation gauge that the government issued Friday — the personal consumption expenditures price index — over the better-known. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.Inflation fell sharply in the second half of last year before sticking well above the Fed's 2% target in the first few months of 2024.
Gas prices, though, jumped 2.7%, just from March to April. Likewise, the costs of many services rose faster than the Fed would like. Restaurant meals, for example, increased 0.3% from March to April and are up 4% from a year earlier. Entertainment prices, including for movies and concerts, jumped 7.4% from 12 months earlier.have underscored their intention to keep borrowing costs high as long as needed to fully defeat inflation.
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