US Inflation Heats Up, Fed Considers Future Rate Hikes

The core PCE price index, the inflation index favored by the Fed, re-accelerated in April, remaining near the 5% level for nearly a year, as inflation shifts from category to category. Services inflation re-accelerated in April, driven by spikes in healthcare and housing costs, while durable goods prices rose, driven by a jump in motor vehicles and parts. The PCE price index for gasoline and other energy goods spiked in April, while the PCE price index for food was roughly unchanged. The overall PCE price index re-accelerated to an increase of 4.4% in April compared to a year ago, pushed down by the year-over-year plunge in energy prices.