US inflation gauge jumps as recovery accelerates

U.S. inflation indicators that the U.S. government is watching Federal Reserve Recorded the largest year-on-year increase since the 1990s in April, rising more than expected, spurring concerns about price increases.

The Commerce Department’s core consumer spending index, excluding volatile food and energy costs, rose 3.1% last month compared to a year ago. This surge showed a sharp rise compared to the annual rise of 1.9% in March, higher than the consensus forecast of an estimate of a 2.9% rise.

On a monthly basis, the core PCE index rose 0.7% last month compared to 0.4% in March.

As a result, the core PCE price index is well above the Fed’s target of 2%, reaching unrecorded levels since the 1990s.

The surge in the PCE price index Ring a new alarm The US economic recovery is overheating as the pandemic weakens and demand surges.But Federal agency official They suggest that the factors driving change, such as large-scale fiscal stimulus and supply chain bottlenecks, are mostly temporary and that inflation is likely to recede later this year. I will.

One of the biggest factors in the year-on-year increase in inflation reported in April is related to the so-called “base effect”. 2020 measurements were very high during the first coronavirus blockade. It was low.

Since last year, the Fed has taken a more forgiving approach. inflationStrives to achieve price increases slightly higher than the target to compensate for long-standing low inflation and promote full employment more strongly.

However, US central bank officials have categorically claimed that they are ready to act if recorded inflation or inflation expectations appear to be out of control.

Including volatile energy and food prices, the PCE price index rose 3.6% compared to April 2020, much faster than the 2.4% rise in March.

Data were released in the same report, showing that April personal income fell 13.1%, stimulus payments began to decline and consumption increased 0.5%.

Investors were generally anticipating rising inflation as the US economy recovered from the pandemic, as it had already prepared a temporary blow to rising consumer prices.

The $ 21 trillion market for US government debt remained stable after its release, with long-term government bond yields unchanged.

Benchmark 10-year bonds, which affect global borrowing costs, are currently trading at 1.61%. It remained around 0.9% at the end of last year and reached a recent high of 1.78% in March.

US inflation gauge jumps as recovery accelerates

Source link US inflation gauge jumps as recovery accelerates

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