Price pressures increased in February and consumer spending inched up a less-than-expected 0.1%, the Bureau of Economic Analysis said Friday. The data sharpened concerns that the economy is sinking into a period of weak growth and rising inflation.
The personal consumption expenditures (PCE) price index excluding volatile food and energy — the Federal Reserve’s preferred measure of inflation — accelerated to a 2.8% annual rate in February from 2.6% in January. The Fed aims to curb inflation at 2%.
The gain in core PCE “is likely just a precursor to sharper increases in the coming months as tariffs make their way into consumer price data via either a direct impact or on the back of rising inflation expectations,” the Conference Board’s Shulyatyeva said in a statement.