Washington, April 30 (IANS) US personal consumption expenditures (PCE) price indexes, the Federal Reserve (Fed)’s preferred inflation measure, continued to surge by 6.6 per cent in March over the past year, the Commerce Department reported.
That compared with a downwardly revised 6.3 per cent year-on-year growth in February, according to the department’s Bureau of Economic Analysis on Friday.
Excluding the volatile food and energy, the core PCE price index increased 5.2 per cent in March from a year ago, compared with 5.3 per cent in February, Xinhua news agency reported.
PCE price indexes rose 0.9 per cent month-on-month in March amid surging inflation, after increasing by 0.5 per cent in February, the report showed.
The latest data is another reminder that inflation has been persistently high, which could warrant a 0.5-percentage point rate hike at the central bank’s policy meeting next week, as signaled by some Fed officials.
It is appropriate for the US Federal Reserve to “move a little more quickly” amid surging inflation and accommodative monetary condition, Fed Chair Jerome Powell said last week, signaling a 50-basis-point rate hike for the May meeting.
The US Commerce Department reported Thursday that the US economy shrank at an annual rate of 1.4 per cent in the first quarter this year amid the Omicron surge and elevated inflation, raising the fear of a looming recession.
Gary Hufbauer, a former US Treasury official and non-resident senior fellow at the Peterson Institute for International Economics, told Xinhua that there’s no historical experience that suggests with such high inflation, the Federal Reserve is able to bring inflation down to its 2-per cent goal without a recession.
The only question is when the recession really starts, Hufbauer said.