US price inflation reached 2.7 percent in April-E24

The US Federal Reserve's preferred measure of inflation remains far from target.

US price inflation ended at 2.7 per cent in April, according to the latest personal consumption expenditures figures from the US Bureau of Economic Analysis.

In advance, it was expected that US inflation would remain unchanged at just 2.7 percent, according to estimates compiled by Bloomberg. As expected, core inflation was also unchanged at 2.8 percent in April.

Personal consumption expenditures inflation is the US Federal Reserve's preferred method of measuring inflation.

The US central bank (the Federal Reserve) is ruling like Norges Bank here at home after keeping inflation at 2 percent.

Among the highlights was a 1.2 percent increase in energy prices compared to last month. Food prices fell by 0.2 percent.

– A step in the right direction

Chief Economist Note A. Magnussen at DNB Markets noted that core inflation rose on a monthly basis by 0.2 percent.

– It's lower than the numbers we saw in the first quarter, when we had very high numbers. It is positive in terms of the prospects of interest rate cuts later this year, he told E24.

He emphasizes that today's numbers are only one month's numbers, and that Fed members have indicated that they want to see good numbers for several months.

– In any case, this is a step in the right direction, says the great economist.

PCE inflation is one of the two main methods for calculating price weights and is the Fed's preferred method.

On your way down

After moving steadily downward over the past year, US inflation appears to have stabilized at a higher level than the Fed would like.

Price inflation in the United States peaked at very high levels just under two years ago, after which there was a clear downward trend for a prolonged period. However, this development has shown signs of stopping in recent months.

The main reason inflation was so high in the first quarter of this year was service prices, linked to higher wage growth, says Magnussen at DNB Markets.

There are now possibilities that wage growth is on its way down in the United States. He says this is a downward trend due to the fact that pressure in the labor market has eased considerably.

The market expects Fed Chairman Jerome Powell and the rest of the interest rate committee members to keep interest rates unchanged at the meeting scheduled for June 12 at approximately 99%. CME FedWatch tool.

The key interest rate in the United States is set in a range of 5.25 percent to 5.5 percent, the highest level in 22 years.