Thanks to the Friday report on personal consumption expenditures (PCE) for March, published by the Bureau of Economic Analysis (BEA), the Federal Reserve received clear data indicating that inflation remains high for now, but its growth is slowing down both in monthly and annual terms.
The report says that for March 2023, personal income for consumers increased by $67.9 billion, an increase of 0.3%.
For the month, the PCE was up just 0.1%, and for the year it was up 4.2%. That was 0.8% less than in February, when the annual rate was 5%. This was well below the expectations of economists, who thought annualized inflation would be 4.6%.
Compared to the previous month, the core PCE rose 0.3%. And up 4.6% from a year ago, with February down 0.1% from 4.7%.
The core PCE does not include energy and food costs and is the preferred inflation indicator of the Federal Reserve.
Economists predicted the base PCE to be lower than last year at 4.5%.
Following this report, according to the CME FedWatch tool, there's a higher probability that at the FOMC meeting, which will take place this week, the Fed will implement its 10th consecutive rate hike. The chances increased from 83.9% to 85%.
After the report data was released, the dollar rose slightly, only by 0.18%. And going into the weekend, it was fixed at 101.64.