The US Federal Reserve's favored measure of inflation remained unchanged in April, according to government data published Friday, as services prices remained elevated.
The news will likely lead the US central bank to keep interest rates elevated throughout the summer, as it balances a desire to start easing monetary policy with the need to keep inflation falling towards its long-term two percent target.
The personal consumption expenditures (PCE) price index rose at an annual rate of 2.7 percent in April, the Commerce Department said in a statement, while monthly inflation increased by 0.3 percent.
These figures were in line with the median forecast in a survey of economists conducted by Dow Jones Newswires and The Wall Street Journal, and came in at the same level as it did in March.
After falling for much of last year, inflation accelerated again at the start of 2024, reducing the likelihood of early rate cuts.
High rates also complicate US President Joe Biden's reelection message as he seeks to convince still-skeptical consumers that the economy is heading in the right direction ahead of November's vote.
In April, services sector inflation drove much of the increase, rising at an annual rate of 3.9 percent -- slightly lower than a month earlier.
Stripping out volatile food and energy prices -- both of which continued to rise last month -- the closely watched "core" measure of inflation rose at an annual rate of 2.8 percent in April, in line with expectations.
This suggests that underlying inflation remains elevated, a fact which could keep the Fed on pause for longer than previously anticipated.
On Thursday, New York Fed president John Williams, who is a permanent voting member of the US central bank's rate-setting committee, said he expected inflation would "resume moderating in the second half of this year."
"Looking at all the data, I don't feel any urgency or need to make a decision now," he told an event in New York, adding that things were going in the "right direction."
The data published Friday also show that personal income eased to 0.3 percent last month, the Commerce Department said, down slightly from 0.5 percent in March.
Personal savings as a percentage of disposable income came in at 3.6 percent in last month, in line with the revised figure from March.
