Prices were up by 3.6 percent in April compared to a year ago, the fastest pace since 2008, continuing a trend of rising inflation.
The Bureau of Economic Analysis’ personal consumption expenditure inflation measure climbed 3.6 percent in April from the prior year — the strongest reading in 13 years and more than the 3.5 percent gain that economists in a Bloomberg survey had expected. The core price index, which strips out volatile food and fuel prices, rose 3.1 percent in the year through April — the fastest pace since 1992. Prices rose 0.7 percent compared with the prior month, the biggest increase in two decades. The report showed that personal income declined sharply in April as a jump caused by stimulus payments in March faded. Income fell by 13.1 percent, actually a smaller decrease than the 14.2 percent drop economists had expected [NY Times].
Personal spending rose 0.5 percent, a slow but steady pace, but that improvement eroded when counting for price increases. In a surprise to economists, spending actually declined slightly when adjusted for inflation, falling by 0.1 percent — missing the 0.2 percent gain they had penciled in. A few weeks ago, a different measure of inflation, the consumer price index showed an even higher inflation figure: 4.2 percent. That index tends to be higher than the figure in today’s release, which is the measure of inflation watched most closely by the Federal Reserve [Bloomberg].
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POLITICS EDITOR: CARSON CHOATE
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