Key U.S. inflation gauge rises 3.1% year over year, higher than expected

The core personal consumption expenditures price index increased 3.1% in April year-over-year. U.S. Federal Reserve officials consider the core PCE to be the best gauge of inflation.

Key U.S. inflation gauge rises 3.1% year over year, higher than expected

Jeff Cox reports for CNBC:

The core personal consumption expenditures index was forecast to increase 2.9% after rising 1.9% in March.

The index captures price movements across a variety of goods and services and is generally considered a wider-ranging measure for inflation as it captures changes in consumer behavior and has a broader scope than the Labor Department’s consumer price index. The CPI accelerated 4.2% in April. Over the past month, core PCE rose 0.7 %, also quicker than the expected 0.6%.

That increase in inflation came with a sharp deceleration in personal income, which declined 13.1%. But that actually was less than the 14% estimate. Personal income had surged 20.9% in March following the latest round of government stimulus checks.

Even with the $3.2 trillion decline in personal income, the savings rate remained elevated at 14.9%. Consumer spending rose 0.5%, in line with estimates.

Disposable personal income, after taxes and other withholdings, tumbled 14.6%.

MacDailyNews Take: Obviously more discretionary income means more disposable income which is better for Apple.

Inflation is repudiation. — Calvin Coolidge

When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan

6 Comments

    1. Isn’t that why sooo many Americans voted for the demmies? Can’t we all just work together to get that inflation up to double digits? Why is the US so behind all those other successful socialist countries? I just scratch my head…

  1. Since the inception of the federal Reserve in 1913-14, the US dollar’s value has declined close to 90%. Through that time, both D’s and Rs have been driving the bus. A few were socialist in intent and definition. Many were not…but we’ve ALL had a progressive issue of maintaining our “bank.”

    It’s the mindset of many today that all we need is a little more stimulus to get over this hump and any future hump…which that deepens the hole and the effect is a REAL burden and REAL weight. So, jettison the naiveté that pushes the responsibility on the “socialists.” Your team and my team on Cap Hill have brought us to this point.

    We’ve lost the power of JFK’s statement;

    “Ask not what your country can do for you, but ask what you can do for your country.”

    Parallel thought from Alexander Solzhenitsyn;

    It is time in the west to defend not so much human rights as human obligations.

  2. FYI, the core personal consumption expenditures index for April 2020 was -5.5%.

    Once again, because CoVid messed up everything in 2020, none of these Year-over-Year percentage change numbers aren’t worth diddly.

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