A new federal report suggests that, yes, inflation is still rising, but at a slower pace. The personal consumption expenditures price index or PCE, which measures inflation, rose 0.1% in March, compared to 0.3% in February, according to a Bureau of Economic Analysis report released Friday.
The PCE tracks the prices that U.S. consumers are paying for goods and services.
The BEA report also found:
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On an annual basis, the PCE price index rose 4.2% in March. In February, that figure was 5.1%.
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In the last 12 months, overall food prices rose 8%, and energy prices fell 9.8%.
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Annually, the prices of goods increased 1.6%, while prices for services swelled 5.5%.
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In March, disposable personal income rose 0.4%, or $71.7 billion.
The Federal Reserve, which will announce the latest Fed rate on Wednesday, uses core PCE as its preferred measure of inflation. That’s because core PCE excludes food and fuel — both of which can experience volatile price swings. So core PCE illustrates whether average inflation is rising or falling but those variables don’t sway it. Core PCE increased 0.3% both in March and February, according to the report.
The BEA calculates the PCE index using data from businesses and producers provided by the U.S. Census Bureau. The bureau estimates what goods and services were sold in a given period through trade surveys, economic censuses and quarterly reports. The BEA also factors in the gross domestic product or GDP.
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Cara Smith
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