Inflation rose stubbornly in April, bolstering the prospect of interest rates staying higher for a longer period of time, according to a gauge released Friday by the Federal Reserve closely followed.
The personal consumption expenditures price index, which measures a variety of goods and services and adjusts for changes in consumer behavior, excluding food and energy costs, rose 0.4%, compared to the Dow Jones estimate of 0.3%.
On a year-over-year basis, the measure rose 4.7%, more than expected by 0.1 percent, the Commerce Department said.
Headline PCE, including food and energy, rose 0.4% and increased 4.4% from a year ago, up from the 4.2% rate in March.
Despite the high inflation rate, consumer spending was good as per capita income increased.
Spending rose 0.8% for the month, while personal income rose 0.4%, the report showed. Both numbers were expected to increase by 0.4%.
Prices of goods rose 0.3% and services rose 0.4% and were almost evenly spread. Food prices fell less than 0.1%, while energy prices rose 0.7%. On a year-over-year basis, prices of goods rose 2.1% and services rose 5.5%, a further sign that the U.S. is leaning back toward a services-focused economy.
Food prices rose 6.9% from a year ago, while energy prices fell 6.3%.
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