Forbes Chairman and Editor-in-Chief Steve Forbes warns of US prices rising amid global tariff tensions and rising among Federal Reserve leaders.
The Federal Reserve's priority inflation gauge showed price growth slowed in March, indicating that inflation was close to central bank target rates.
On Wednesday, the Commerce Department reported that the Personal Consumption Expense (PCE) index was flat compared to the previous month, up 2.3% per year. These numbers were primarily in line with estimates of economists voted by the LSEG. This was predicting a flat monthly price growth and annual inflation of 2.2%.
Core PCE, which excludes volatile food and energy prices, also remained flat for a month, up 2.6% per year. LSEG economists predicted a small monthly increase of 0.1% while annual estimates were in line with the report.
Federal Reserve policymakers see core data as a better indicator of inflation, but they focus on PCE headline diagrams to aim for the pace of price rise to a 2% target. Headline PCE fell from 2.5% in February, while Core PCE also fell from 2.8%.
The US economy has slowed sharply, shrinking by 0.3% in the first quarter.
Product prices fell 0.3% per year in March, durable product prices fell 1%, and non-durable products prices rose 0.1%. Prices for the category remained flat in December, but marked the first decline in overall goods prices since November.
Service prices were 3.5% higher in March than a year ago, slightly cooler than the 3.8% growth seen in February.
The pace of price growth was eased in March. (Elijah Nouvelage / AFP Getty Images / Getty Images)
Wages and salaries were 0.5% higher each month, up from 0.4% last month, with a higher monthly profit since November.
Personal savings rates as a percentage of disposable personal income were 3.9% in March, down slightly from 4.1% in February.
The private sector added 62K jobs in April.
“Consumers closed the first quarter with a strong memo as they moved forward with purchasing high-value items in anticipation of increased tariff prices.”
However, Boussour said, “While data refers to a robust carryover into the second quarter, consumer spending is expected to go downshift further in the coming quarter. She added that EY's forecasts have high tariffs, new inflation impulses, and that core PCE inflation rates are pushing into the 3.5% to 4% range at the end of 2025.
The Commerce Bureau's report is as the Federal Reserve assesses economic data, monitors inflation and labor market health, and monitors labor market health ahead of the next policy meeting scheduled for next week.
Federal Reserve Chairman Jerome Powell said the central bank is not rushing to cut interest rates in a hurry. (Mandel Ngan/AFP via Getty Images/Getty Images)
Federal Reserve Chairman Jerome Powell said monetary policy is not a preset course as central banks assess the economic situation and the impact of the Trump administration's tariff policy, rather than rushing to cut interest rates.
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According to the CME FedWatch tool, the Fed has stabilized benchmark interest rates in its past two meetings, and the market expects that trend to continue as the federal funding range is 93.5%, with a current target range of 4.25% to 4.5% to 4.5%.
