The US PCE inflation stands at 2.7% and remains in line with forecasts.

In the last month, both the overall and core rates have increased by 0.3% compared to February figures.

Ignacio Teson•Friday, April 26, 2024•1 min read

The Federal Reserve’s preferred statistic for monitoring inflation, the PCE index, stood at 2.7% year-over-year.

The US Personal Consumption Expenditures (PCE) inflation has rebounded in March to 2.7% on a year-over-year basis, according to data released by the US Department of Commerce’s Bureau of Labor Statistics. This indicator, one of the Federal Reserve’s (Fed) favorites, brings a sigh of relief for the country’s inflationary outlook.

Meanwhile, core inflation has remained at 2.8%, three tenths below the previous month’s reading.

In the last month, both the overall and core rates have increased by 0.3% compared to February figures.

Goods rose by 0.1% in the third month of the year, while the cost of services grew by 0.4%. On a year-over-year basis, there has been a 0.1% increase for goods and a 4% increase for services.

Personal income, on the other hand, rose by 0.5% ($122 billion) in March, and personal disposable income also increased by 0.5% ($104 billion).

All eyes are on the S&P 500 today after core personal consumption expenditures rose more than expected in March, climbing 0.8% ($160.9 billion).

Another inflation index, the Consumer Price Index (CPI), also rebounded last month, reaching 3.5% over 12 months. This prompted Federal Reserve Chairman Jerome Powell to warn that “it would take longer than expected” for the Fed to have confidence in a lasting return to low inflation.

Markets, which until recently expected the first rate cut in June, are now pointing to September or even November, according to CME Group’s estimate. This is mainly because the labor market remains strong, with a very low unemployment rate of 3.8% in March.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.