Consumer spending inflation in the US has reached a three-year high

Inflation in the US continues to exert steady pressure on the country's economy. Fresh statistics on personal consumption expenditures in the United States turned out to be slightly below economists' expectations, nevertheless - reached three-year highs in terms of growth rates, Barron's and Reuters wrote.

- The overall Personal Consumption Expenditures (PCE) index rose 3.8% year-on-year in April, data from the U.S. Bureau of Economic Analysis (BEA) showed. This is the largest increase since Ma 2023 and an acceleration relative to March data, when total PCE rose 3.5% year-on-year. On a monthly basis, the index added 0.4% in April, down from a 0.7% gain in March and below the forecasts of economists surveyed by FactSet, Barron's reports. They had anticipated a 3.9% year-on-year increase in total PCE and a 0.5% month-on-month increase.

Most of the increase in the overall PCE inflation index is due to the increase in energy prices, especially gasoline. This is what led to the sharp jumps in the consumer price index and producer price indexes for April, the data on which were published earlier in May, the publication notes.

- The Core Personal Consumption Expenditures Index (Core PCE), which excludes volatile food and energy prices and is the US Federal Reserve's preferred indicator, meanwhile rose at an annualized rate of 3.3% in April (slightly faster than March's 3.2% growth rate) and accelerated 0.2% from the previous month, the agency's data showed. The data matched economists' forecasts, Barron's reports.

- The agency also provided an adjusted estimate of US gross domestic product (GDP) growth for the first quarter. The economic growth rate amounted to 1.6% on a seasonally adjusted annualized basis. Economic growth was revised downward by 0.4 percentage points - the first (preliminary) estimate, released in late April, was 2%. The Bureau explained that the deterioration of the indicator was due to weaker than initially expected business investment and consumer spending of the population.

Futures on the S&P 500 changed little amid the publication of macroeconomic data: decreased by 0.02%, contracts on the Nasdaq 100 added 0.05%, on the Dow Jones - lost 0.16%.

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