Newly released economic data suggests that inflation increased in March, as predicted by market analysts.
The core personal consumption expenditures (PCE) price index captured a 0.3% rise in the costs of goods and services over the course of March, pushing the annual inflation rate up to 4.6%. Core PCE calculations exclude food and energy prices since both markets tend to fluctuate of their own accord. However, when added to the total, the index instead shows price increases of 0.1% over February and 4.5% year-over-year. Other relevant statistics saw no change in the pace of consumer spending, despite income improving slightly during the period.
For the month, analysts correctly predicted core PCE prices would increase by 0.3% but narrowly missed the price index’s annual inflation rate with a forecast of 4.5%. While this rate has fallen from the 7% peak seen last summer, the number is still higher than the Federal Reserve’s growth target of 2% year-over-year.
Since 2022, the Fed has aggressively introduced interest rate hikes to suppress prices but refrained from making another adjustment in March to avoid further economic destabilization in the wake of several unexpected bank failures. Although the committee has yet to respond to the latest statistics, chair Jerome Powell hinted as far back as February that rates were likely to see more increases if the current disinflationary measures failed to produce the desired effect. Many auto dealers have pointed to the country’s high levels of inflation and interest rates as the main contributors to the industry’s affordability issues.