The Federal Reserve’s key inflation measure showed growth in February that exceeded preliminary expectations, while consumer spending increased on a smaller scale than forecast.
The mentioned information was published on Friday, March 28, by the United States Commerce Department.
The core personal consumption expenditures price index in the US rose 0.4% in February for the month. It is worth noting that this is the largest monthly gain since January last year. Against the mentioned background, the 12-month inflation rate reached 2.8%. At the same time, economists surveyed by Dow Jones predicted that the core personal consumption expenditures price index in February would grow by 0.3% for the month. Their forecast also called for a 12-month inflation rate of 2.7%.
It is worth noting that core inflation does not take into account volatile food and energy prices. This figure is generally considered as the best indicator of long-term inflation trends.
In the all-items measure, the price index rose 0.3% on the month. This indicator increased by 2.5% year-on-year. In this case, both figures match the forecasts.
At the same time, the United States Bureau of Economic Analysis report indicates that consumer spending in February increased by 0.4% for the month. The forecast provided for the growth in this indicator by 0.5%.
After the mentioned data was published, stock market futures declined for a short time. Treasury yields demonstrated a similar dynamic.
The data released on Friday means that the Fed’s wait-and-see tactics regarding interest rate changes are likely to continue. The current inflation rate is not one that can accelerate the lowering of borrowing costs.
As we have reported earlier, US Consumer Sentiment Worsens.
