On May 30, 2024, shoppers were seen carrying shopping bags as they walked through The Village at Corte Madera in California. Despite this, economists predicted that US consumer spending would grow at a slower rate in April compared to March. The Personal Consumption Expenditures price index, a key inflation gauge for the Fed, increased by 0.3% from the previous month, resulting in an annual rate of 2.7% that matched March’s figure.
Inflation in April remained at the same high level as in March, posing challenges for consumers as costs continued to rise quickly. The Federal Reserve is working diligently to combat rising prices in response to this inflation. However, excluding the categories of food and energy, the core PCE price index showed slower growth in April, rising by 0.2% compared to 0.3% in March. On an annual basis, the core index held steady at 2.8%. While the report on Friday highlighted the challenges of slowing inflation, economists had largely predicted these results.
Forecasts anticipated that the overall and core indexes would show minor changes from March. The core index has especially been in focus for the Fed as it provides a clearer view of underlying inflation trends. Consumer spending also saw a decrease, rising by only 0.2% in April compared to a 0.7% increase in March. Disposable income gains also slowed, increasing by 0
