Core inflation hit an annual rate of 3.3% in April, as expected, Fed’s preferred gauge shows Inflation continued to impact consumer spending in April, with the personal consumption expenditures price index rising 0.4% for the month and 3.8% annually, while core prices increased 0.2% monthly and 3.3% annually. Despite these figures, economists noted that the soft monthly readings might indicate a cooling of price increases. The Federal Reserve closely monitors PCE measures for policy decisions, with officials generally favoring core prices as a better indicator of long-term inflation trends.

• April’s personal consumption expenditures (PCE) price index rose 0.4% month-over-month and 3.8% year-over-year.
• Core PCE prices, excluding food and energy, increased by 0.2% for the month and 3.3% annually.
• The annual inflation rates met economists’ forecasts, but the monthly figures offered some hope of easing price pressures.
• First-quarter GDP growth was revised down to 1.6%, below initial estimates.
• Initial jobless claims rose slightly to 215,000 for the week ended May 23.
• Durable goods orders saw a significant surge of 7.9% in April.
• Consumer spending increased 0.5% in April, but income remained flat, and the savings rate fell to its lowest point since June 2022.
• Traders anticipate the Fed will keep interest rates unchanged until late 2026, with some expecting a rate hike in early next year.
• New Fed Chair Kevin Warsh believes interest rates could be lowered, potentially facing opposition.