Another Key Inflation Gauge Sees a Higher-Than-Expected Jump
May 28, 2021
Worries about spiking inflation intensified today as another key inflation gauge rose faster than expected.
The core personal consumption expenditures (PCE) index climbed 3.1% in April as compared to a year earlier, according to the Commerce Department. That’s bigger than the 2.9% increase economists had expected, and it follows a 1.9% annual increase in March.
The index tracks prices across a wide variety of goods and services, and is considered provide to be broader scope than the Labor Department’s consumer price index (CPI). PCE is also the primary metric that Federal Reserve officials use to monitor inflation.
The increase comes on the heels of the CPI’s 4.2% annual increase in April. The Fed has stated that it intends to allow inflation to run above its 2% target for some time, believing the current spike in inflation to be “transitory” and expects it to fade once the economy fully returns to normal.