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.
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