Key inflation measure stayed steep in April
Why it matters: The personal consumption expenditures price index may be leveling off at a high level as the Fed moves aggressively to tamp down price spikes.
By the numbers: For the month, prices for goods and services Americans consume were up 0.2%. Excluding volatile food and energy costs, prices rose 0.3% — the same pace for the third month straight.
- Prices rose 6.3% from a year ago, down from 6.6% in March, receding from a 40-year high.
- Strip out volatile food and energy, and inflation rose 4.9% year-over-year (compared to 5.2% the prior month).
Details: Americans' spending is rising much faster than their incomes, plunging the savings rate.
- The personal saving rate was 4.4% in April, down from 5% in March and the lowest since September 2008, the onset of the Global Financial Crisis.
- It suggests Americans are spending down some of the extra savings accumulated during the pandemic, in part to keep up with high inflation.
- Over the last two months, consumption spending rose by 2.3% (not adjusted for inflation), while disposable personal income rose only 0.7%.