Barrons.com
The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, grew at an annualized rate of 3.4% in the first quarter, nearly double the 1.8% pace logged during the fourth quarter. Core PCE inflation, which excludes the more volatile costs of food and energy, climbed 3.7% in the first three months of the year, up from the fourth quarter’s 2% pace, the Bureau of Economic Analysis said Thursday. Thursday’s quarterly inflation data suggest, assuming no revisions to monthly data, that the core PCE deflator for March, to be released Friday, will come in above 0.4% rather than the current consensus forecast for a month-over-month increase of 0.3%, writes James Knightley, chief international economist at ING.