Prices in the U.S. rose again in April, the Federal Reserve’s preferred PCE index found, but a recent surge in inflation in early 2024 may have also shown signs of fading.
The PCE index rose 0.3% last month, the government said Friday. Economists polled by The Wall Street Journal had forecast a 0.3% gain.
Yet the more closely followed core rate that strips out food and energy increased by a smaller 0.2%. That’s the smallest gain since the final month of 2023.
The core index is viewed by the Fed and Wall Street as a better predictor of future inflation.
The core rate of inflation over the past 12 months stayed at 2.8% for the third month in a row, leaving it just shy of a three-year low.
The 12-month increase in the overall PCE, meanwhile, was also unchanged at 2.7%.