© Reuters
By Geoffrey Smith
Investing.com — Consumer prices rose less than expected in February, the latest monthly update of the Federal Reserve’s preferred measure of inflation showed.
The price index for rose only 0.2% on the month, less than the 0.3% expected, and a slowdown from a downwardly-revised 0.5% increase in January.
The annual rise in prices edged down to 4.6% from 4.7% as a result, matching the lowest it has been since the end of 2021.
The numbers may go some way to persuading the Fed that it no longer needs big interest rate hikes to keep inflation in check. Headline core PCE inflation has been on a downward trend for a full year now, but is proving to be more stubborn than the Fed had expected while the U.S. was still suffering from pandemic-related disruption.
Other data released at the same time showed household spending and income also rising roughly in line with expectations, at a modest 0.2% and 0.3% on the month, respectively. The Bureau of Economic Analysis said that strong increases in spending on housing, health care and gasoline were offset by sharply declining outlays on motor vehicles and accessories, as the used car market continued its reversion to pre-pandemic norms.
The personal savings rate ticked up to 4.6% from 4.4%.
