US PCE inflation holds at 2.7% in April as market expected

US PCE inflation held at a 2.7% yearly increase in April while core inflation, which strips out food and energy prices, maintained its pace at 2.8% for the third months, according to the Bureau of Economic Analysis’s latest report.

• Both numbers are in line with market expectations.
• If we look a bit deeper — to the third decimal point of the figures — core PCE inflation dropped slightly to 2.754% from 2.813% ; headline PCE inflation, meanwhile, decelerated to 2.655% from 2.703%.

The month-over-month increase in PCE inflation was 0.3% for all items and 0.2% for the core figure

• The monthly rate was 0.3% for both headline and core PCE inflation in March.
• If we again look to the third decimal point we would notice April drop in MoM rate for the two figures are very similar. Headline PCE dropped from 0.338% to 0.257% and core decreased from 0.334% to 0.249%.

Slower monthly rate of increase also led the annualized three-month growth rate for core PCE to drop down to 3.46%, from 4.4% in March.

• Six-month growth rate on the other hand increased to 3.2%.