Inflation remained elevated in April, according to an indicator closely watched by the Federal Reserve released on Friday, which could increase the likelihood that interest rates will remain elevated for longer.
The personal consumption expenditures price index, which measures a variety of goods and services and adjusts for changes in consumer behavior, rose 0.4% for the month, excluding food and energy costs, above the Dow Jones estimate of 0.3%.
On an annualized basis, the Commerce Department reported that the indicator rose 4.7%, 0.1 percentage point higher than expected.
The headline PCE, which includes food and energy, also rose 0.4%, and was up 4.4% year-over-year, up from 4.2% in March.
Despite higher inflation, consumer spending has held up well as personal incomes have risen.
The report showed spending rose 0.8% for the month, while personal income rose 0.4%. Both figures are expected to increase by 0.4%.
Price increases were nearly evenly distributed, with goods up 0.3 percent and services up 0.4 percent. Food prices fell less than 0.1 percent, while energy prices rose 0.7 percent. On an annual basis, prices for goods rose 2.1 percent and prices for services rose 5.5 percent, further evidence that the U.S. is tilting toward a service-centric economy.
Food prices rose 6.9 percent from a year ago, while energy prices fell 6.3 percent.
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