Inflation in the United States shows signs of slowing, Commerce Department finds

Inflation in the United States shows signs of slowing

Although one indicator of the price level suggests that inflation in the United States is starting to slow down, the US Federal Reserve will not retreat from its intention to raise interest rates in June and July, according to experts.

The rise of PCE index

The so-called Personal Consumption Expenditures (PCE) index, which is tracked by the U.S. Department of Commerce, rose 6.3 percent year-over-year in April. This is 0.3 percentage point less than in March. In year-on-year terms, there was also a decline from 0.9 per cent in March to 0.2 per cent in April.

There was also a reduction in growth in the core part of the index, i.e. excluding the effect of food and energy prices. In April, the core PCE rose 4.9 percent year-on-year, with the index peaking at 5.3 percent in February, data from the US Commerce Department also show.

Slowing inflation

However, experts say the sign of slowing inflation will not affect the US central bank‘s announced interest rate hike. Fed officials have signalled several times that they are likely to raise rates by half a percentage point in both June and July. Slowing inflation is more likely to lead to further rate rises (in September and later) taking place at a more gradual pace.


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