Article by ForexTime
The Federal Reserve’s preferred inflation measure came in modestly cooler than forecast in February, potentially giving the central bank more breathing room on the next rate rise.
The core personal consumption expenditures (PCE) price index, which excludes energy and food, rose 1.7 per cent in February from the same month in 2015, compared to expectations of a 1.8 per cent increase. That was the same rate logged in January.
The Federal Reserve has targeted a 2 per cent annual inflation rate — something that just months ago appeared to be out-of-reach. However, many measures of inflation, and perhaps more importantly, inflation expectations, have firmed dramatically in a sign that low oil prices are not causing broader deflationary pressure as some have feared.
Economists have pinned the rising core inflation figures on a tightening US labour market. Indeed, the unemployment rate is expected to have held below 5 per cent this month as the world’s most important economy added 208,000 jobs.
Meanwhile, the same report showed personal income climbed 0.2 per cent on a month-on-month basis in February, slightly better than expectations of a 0.1 per cent rise. Consumer spending was up 0.1 per cent, matching forecasts.
Free Reports:
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com