The Personal Consumption Expenditures (PCE) index report is out, offering insight into the current state of the U.S. economy. Inflation was up 2.3% year-over-year in March, compared to estimates of 2.1%. It also bears mentioning that February inflation was 2.5%.
Core inflation reported in the March PCE price report was 2.6% year-over-year. For comparison, experts expected that to come in at 2.2%. Investors will also note that core inflation last month was up 2.6%.
On a month-to-month basis, March inflation increased decreased less than 0.1%, compared to 0.3% in February. Core inflation was up less than 0.1% month-to-month.
What Does This Mean for the U.S. Economy?
The PCE report is the Federal Reserve’s preferred metric for measuring inflation. That means today’s data could have a strong impact on the central bank’s policies. This is important to note, as the next Fed meeting will be on May 6 and May 7.
With this data in hand, the Fed is unlikely to cut interest rates. The central bank has held off on interest rate cuts this year after a series of them in 2024. This is to rein in inflation, which is still above its 2% target.
Federal Reserve Chairman Jerome Powell has faced criticism from President Donald Trump over his slow reduction of interest rates. However, Powell is also dealing with the economic impact of the President’s tariffs. This standoff could continue as Powell has no intent to step down as the head of the central bank.
The Next Economic Calendar Event to Watch
With the PCE report out, many may be looking to the next big economic event worth keeping an eye on. Unemployment data is set to release this week with the Challenger report tomorrow and payroll data on Friday. Those interested in this information will want to stay up to date with the TipRanks Economic Calendar and Economic Indicators Dashboard.
