The Fed’s preferred inflation gauge rose 4.9% in April, still near 40-year high

Former Council of Economic Advisers Acting Chairman Tyler Goodspeed provides insight into how the Biden administration is handling the U.S. economy.  A key measure of annual inflation that is closely watched by the Federal Reserve continued to run hot in April as widespread supply disruptions, extraordinarily high consumer demand and worker shortages fuel rapidly rising prices. The personal consumption expenditures price index, which measures costs that consumers pay for a variety of different items, showed that core prices – which exclude the more volatile measurements of food and energy – soared 4.9% in the year through April, according to the Bureau of Economic Analysis. That measurement is the Fed’s preferred gauge to track inflation; it marks the 13th consecutive month the gauge has been above the central bank’s target range of 2%. Still, it was slightly below March’s measurement of 5.2%, and is down from the 39-year high of 5.3% that was recorded in February. In the one-month period between March and April, core prices soared 0.3%, suggesting that prices are leveling off, but are not yet falling. The slowdown in inflation in April largely stemmed from a drop in the price of gasoline and other energy sources. Gas prices soared in March as a result of the Russia …

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