The Federal Reserve monitors inflation by tracking a number of different measures, such as the Consumer Price Index (CPI), the Producer Price Index (PPI), and the Personal Consumption Expenditures (PCE) index. These indexes measure changes in the prices of goods and services over time, while also providing the Fed with a broad picture of overall price trends in the economy.
Inflation continued to rise, as stats from last month indicate. This happened despite a year’s worth of increases in interest rates by the Federal Reserve. The personal consumption expenditures price index, while excluding food and energy, rose by 0.3% back in March 2023. However, the estimates of experts indicated the same scenario, according to CNBC.
The core PCE, on the other hand, has been through an increase of 4.6% annually. This latter scenario exceeded expectations. The headline PCE includes food and energy, and it rose 0.1% for March, which equates to a 4.2% annual increase.
Personal income has also increased
The stats also show that personal income has been through an increase of 0.3% for the month, and that consumer spending has remained flat. The estimations also haven’t seen that the employment cost index will increase 1.2% during the first quarter.
As for the annual rates, it must be said that they are below the peaks that were reached last year. However, they still surpass the 2% target of the central bank. This indicates that price increases are stickier than how the policymakers have expected.
There will be a new meeting next week, where the Federal Open Market Committee will likely approve another quarter percentage point increase.