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US inflation rate soars to 6.6% in March
By Yashasvini Razdan - Apr 29, 2022, 08:32 PM ET
Last Updated - Feb 24, 2024, 05:34 AM EST
Personal Consumption Expenditure Price Index rose to 0.9% in March
Core PCE increased by 0.3% in March from a month earlier
The core personal consumption expenditures (PCE) price index, rose to 6.6% annually, in March, according to the Bureau of Economic Analysis.
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This figure, including food and energy, has grown at the fastest pace since January 1982.
Excluding food and energy costs, the PCE inflation measure rose 5.2%, a slightly slower pace than the 5.3% recorded in February.
The Fed views the PCE index — the core rate in particular — as the most accurate measure of U.S. inflation, but a slight tick lower is unlikely to change the Fed's policy path.
The Federal Reserve raised the interest rates for the first time in four years to combat inflation and is expected to keep increasing rates all year. At next week's highly anticipated policy meeting, the bank is expected to hike rates by a half-percentage point.
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Energy prices jumped 33.9% for the year ended in March — while food inflation rose 9.2% over the same period.
On a monthly basis, the core PCE increased, which excludes food and energy, rose 0.3%. Including food and energy, the prices rose by 0.9%, more than in previous months.
This measure is closely tracked by the Federal Reserve and fuels concerns surrounding price rise.
PCE index measures price changes in consumer goods and services, excluding food and energy, in the U.S. economy. It has been the primary inflation index used by the U.S. Federal Reserve when making monetary policy decisions, since 2012.
Ongoing pandemic-related shortages of key supplies such as semiconductor chips have triggered price rises. The Fed has withdrawn its massive government stimulus spending during the pandemic.
Despite that, rising inflation has prompted workers to ask for higher pay and businesses to charge higher prices, potentially making it harder for the Fed to reverse the tide.
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Source: Bureau of Economic Analysis
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