U.S. Consumer Prices Rise In Line With Estimates, Core Prices Edge Up Less Than Expected

(RTTNews) - A highly anticipated report released by the Commerce Department on Friday showed consumer prices in the U.S. increased in line with economist estimates in the month of April, although core consumer prices edged up by slightly less than expected.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.3 percent for the third straight month in April, matching economist estimates.

Meanwhile, the report said the core PCE price index, which excludes food and energy prices, crept up by 0.2 percent in April after rising by 0.3 percent in March. Economists had expected another 0.3 percent increase.

The annual rates of growth by the PCE price index and the core PCE price index were both unchanged from the previous month at 2.7 percent and 2.8 percent, respectively. The readings matched expectations.

"An important question for the Fed that has been raised within the FOMC as well as among former Fed officials is whether the focus on reaching 2% is appropriate and if 2.5-3% is a more realistic goal," said Quincy Krosby, Chief Global Strategist for LPL Financial.

She added, "To be sure, the FOMC and Chair Powell have never suggested that monetary easing requires reaching 2%, but they must see progress that inflation is moving closer to the target."

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending.

The report said personal income rose by 0.3 percent in April after climbing by 0.5 percent in March. The increase came in line with economist estimates.

Disposable personal income, or personal income less personal current taxes, crept up by 0.2 percent in April following a 0.5 percent increase in March.

The Commerce Department also said personal spending inched up by 0.2 percent in April after advancing by 0.7 percent in March. Economists had expected spending to rise by 0.3 percent.

However, excluding price changes, personal spending edged down by 0.1 percent in April after climbing by 0.4 percent in March.

With income and spending both showing modest increases, personal saving as a percentage of disposable personal was unchanged from the previous month at 3.6 percent.