Fed’s favorite inflation gauge rose 0.3% in January

What is attracting attention as a countermeasure against inflation is federal reserve It rose again in January as high prices continued to weigh on millions of Americans.

According to the Department of Labor, consumer prices rose 0.3% from the previous month, according to the personal consumption expenditure (PCE) index. On an annual basis, prices rose by 2.4% and fell slightly from the 2.6% recorded in the previous month.

Both numbers were in line with Refintiv economists’ expectations.

In a sign that the Fed’s fight against inflation is making gradual progress, core prices, which exclude more volatile food and energy measures, rose 0.4% from the previous month and 2.8% from a year earlier. This was the highest core inflation rate since February 2021.

Americans are withdrawing money from their retirement accounts to cover living expenses

The Fed is targeting the PCE key figure as it seeks to return consumer prices to 2%. Chairman Jerome Powell He previously told reporters that core data is actually a better indicator of inflation. Both core and headline numbers show that inflation is slowly returning to the Fed’s recommended 2% target.

Other statistics included in the report showed that consumer spending rose just 0.2% in January, compared to 0.7% in December, as Americans prepare for the all-important holiday season. This suggests that the economy is putting the brakes on consumption. Many economists expect spending to slow further in coming months as consumers continue to grapple with expensive goods, high interest rates and the reopening of the economy. federal student loan payments.

The report also showed that personal income rose 1%, more than double the unexpected 0.4% increase.

Stock index futures rebounded on the news, and U.S. Treasury yields fell.

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