And some previous drivers of inflation, notably clogged supply chains, have eased. The government also reported that consumer spending was unchanged from February to March after a tiny gain of 0.1% the previous month, a sign consumers are getting more cautious amid high inflation and interest rates.įriday’s inflation figures point to the dilemma confronting officials at the Federal Reserve: Across the economy, price increases for many goods have slowed significantly. That is the lowest year-over-year overall inflation figure in nearly two years. Compared with a year ago, inflation slowed to just 4.2% from 5% in February, though much of that decline reflected lower gas prices. Overall prices ticked up just 0.1% from February to March, the smallest monthly rise since last July and down from a 0.3% increase from January to February, Friday’s Commerce Department report showed. Some Fed officials are concerned that core inflation hasn’t declined much since reaching 4.7% in July. The index, which excludes volatile food and energy costs to capture “core” prices, rose 0.3% from February to March and 4.6% from a year earlier - still far above the Fed’s 2% target rate.
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