Inflation remained stubbornly high in April, potentially increasing the chances that interest rates could stay high longer, according to a reading released Friday and closely followed by the Federal Reserve.
The personal consumption spending price index, which measures a variety of goods and services and takes into account changes in consumer behavior, rose 0.4% for the month excluding food and energy costs, ahead of the Dow Jones estimate of 0.3%.
On an annual basis, the figure rose 4.7%, up 0.1 percentage point from expectations, the Commerce Department reported.
Including food and energy, headline PCE also rose 0.4%, up 4.4% yoy and up from 4.2% in March.
Despite the higher inflation rate, consumer spending remained stable and personal income increased.
The report showed that spending rose 0.8% for the month, while personal income rose 0.4%. Both numbers were expected to rise 0.4%.
Price increases were spread almost evenly, with goods up 0.3% and services up 0.4%. Food prices fell less than 0.1%, while energy prices rose 0.7%. On an annual basis, goods prices rose 2.1% and services rose 5.5%, another indication that the US is turning back towards a service-oriented economy.
Food prices rose 6.9% yoy, while energy prices fell 6.3%.
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