Key Fed Inflation Gauge Rose 0.3% in February, Less Than Expected

• An inflation gauge the Federal Reserve follows closely rose slightly less than anticipated in February, providing some hope that interest rate hikes are helping ease price increases.
• The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the 0.5% January increase.
• On a 12-month basis, core PCE increased 4.6%, a slight deceleration from 4.7% in January. Including food and energy, headline PCE rose 0.3% monthly and 5% annually, compared with 0.6% and 5.3% in January. The softer-than-expected data came with monthly energy prices decreasing 0.4% while food prices rose 0.2%. Goods prices climbed 0.2% while services increased 0.3%.
• “The inflation trend looks promising for investors. Inflation will likely be below 4% by the end of the year, giving the Federal Reserve some leeway to cut rates by the end of the year if the economy falls into recession,” said Jeffrey Roach, chief economist at LPL Financial.

 

(Source: CNBC)