Personal Consumption Expenditures (PCE) Price Index, declined to 4.2% on a yearly basis in March from 5.1% in February, the US Bureau of Economic Analysis reported on Friday. This reading came in lower than the market expectation of 4.6%.
The annual Core PCE Price Index, the Federal Reserve's preferred gauge of inflation, edged lower to 4.6% from 4.7% in the same period, compared to analysts' forecast of 4.5%. On a monthly basis, Core PCE inflation and PCE inflation rose 0.3% and 0.1%, respectively.
The PCE measures changes in the prices of services and goods purchased by U.S. consumers. It includes everything from furniture and clothing to food, housing, electricity, gas, health care, educational expenses, insurance, and transportation.
The Core PCE excludes food and energy costs since they often have greater volatility than other expenses, and thus their prices shift with more frequency and velocity. Such shifts make it more difficult to accurately gauge inflation trends, which is why they are left out.
Source: FXSTREET
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