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Inflation held steady at historically high levels in April, suggesting that price increases could last much longer than expected.
The Commerce Department’s personal consumption expenditures index, released Friday, showed inflation remained 2.7% higher last month compared with April 2023. That’s identical to the March numbers, which also showed that prices that month were up 2.7% versus the same period last year.
The identical inflation numbers suggest that high prices won’t budge soon even though April’s forecast was in line with economists’ forecasts.
On a month-by-month basis, prices rose 0.3% in April compared with March, according to the PCE index. Monthly inflation readings of 0.2% over time are needed for inflation to calm down.
The PCE measures how much more Americans spent last month compared with April 2003. It’s the gauge favored by the Federal Reserve to determine whether to lower interest rates.
Core PCE inflation, which measures prices excluding the volatile food and energy categories, came in at 2.8% in April. That’s also flat from March.
Friday’s report is unwelcome news for President Biden, who needs inflation to slow down as he makes his pitch for reelection. Polls show consumers are angry over high prices and may take out their frustration on him at the ballot box in November.
In a Gallup poll released this month, 41% of Americans named inflation or the high cost of living as the most important financial problem facing their family. That’s up from 32% in 2022. Prior to 2022, the highest percentage saying inflation was their top problem was 18% in 2008.
A separate Gallup survey found that only 38% of Americans have confidence that Mr. Biden will do the right thing for the economy, the lowest total since Gallup began measuring economic confidence in a president in 2001.
In contrast, the same poll shows that 46% of Americans have “a great deal” or “a fair amount” of confidence that former President Donald Trump, the presumptive GOP nominee, will do the right thing when it comes to the economy.
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