Prices rose only slightly in April, bringing the annual inflation rate closer to the Federal Reserve’s 2% target, even as personal income continued to grow at a strong pace.
The personal consumption expenditures (PCE) price index increased by just 0.1% for the month, marking the second consecutive month of relief for consumers after a period of persistent inflation during the Biden administration. In March, the index showed no change, so April’s figures are likely reflective of President Donald Trump’s economic policies.
The Commerce Department reported Friday that the personal consumption expenditures (PCE) index rose by 0.1% in April from the previous month and 2.1% year-over-year—the slowest annual increase since February 2021. The figures closely matched the expectations of economists surveyed by LSEG, Fox Business reported.
Federal Reserve officials are closely monitoring the headline PCE figure as they work to bring inflation down to their 2% target, though they consider core PCE a more reliable gauge of underlying inflation trends. Headline PCE fell from 2.3% in March to 2.1% in April, while core PCE also declined, dropping from 2.6%.
Goods prices were down 0.4% in April compared to a year earlier, following a 0.3% decline in March. Within that category, durable goods prices fell 0.3% annually, and nondurable goods prices dropped 0.4%.
Meanwhile, service prices in April were 3.3% higher than a year ago—the smallest annual increase since January, Fox Business noted.
Wages and salaries rose by 0.5% in April, matching the pace of growth seen in the previous two months.
The personal savings rate, measured as a percentage of disposable personal income, increased to 4.9% in April, up from 4.3% in March.
