The Bureau of Economic Analysis released figures this week that may show signs of relief when it comes to rising inflation in the United States.
One figure in particular, a favorite measure of the Fed, rose sharply in April, giving a glimmer of hope that there is some relief on the horizon for cash-strapped Americans.
The core personal consumption expenditures (PCE) price index, which measures the prices consumers in the United States pay for goods and services, rose 4.9 percent in April compared to April last year. According to BEA, this could mean the inflation increases will soon come to a halt. While personal income rose less than expected, rising inflation has had consumers dipping into their savings to make ends meet, causing an increase in PCE.
“The increase in personal income in April primarily reflected an increase in compensation and personal income receipts on assets that were partly offset by a decrease in proprietors’ income,” says the BEA. “Within compensation, the increase reflected increases in both private and government wages and salaries. The increase in personal income receipts on assets was led by personal dividend income. The decrease in proprietors’ income was led by nonfarm income.”
Navy Federal Credit Union corporate economist Robert Frick told CNBC, “Consumers remained undaunted by inflation last month, strongly increasing spending and changing their mix to more services such as at bars and restaurants, and travel and recreation as the weather warms. The spending was fueled in part by higher wages, and also by Americans drawing more money out of savings, which is a giant stockpile of at least $2 trillion.”
In response to the release of the BEA report, President Joe Biden issued a statement saying the numbers are “a sign of progress, even as we have more work to do.” Gas prices continue to hamper efforts to combat rising prices as the national average sits at $4.61 a gallon.
ARTICLE: LAURA SPIVAK
MANAGING EDITOR: CARSON CHOATE
PHOTO CREDITS: CNBC
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