11/15/2019

U.S. Inflation Continues Recovery But Remains Below Fed Target

U.S. inflation continued to recover in May from a sharp slowdown earlier this year, a trend that could ease the Federal Reserve’s worries about weak price pressures while potentially tempering investors’ hopes for an interest-rate cut next month.

The Fed’s preferred inflation gauge, the price index for personal-consumption expenditures, rose a seasonally adjusted 0.16% in May from April, the Commerce Department said Friday. It was the third straight month it has met or exceeded the monthly pace needed to hit the central bank’s 2% yearly target.

A less volatile measure, called the core PCE price index—which excludes volatile food and energy items—was up 0.19% from April.

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