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Inflation slowed slightly in April but is still near 40-year high

Inflation slowed slightly in April but is still near 40-year high
The Personal Consumption Expenditures index increased 6.3% from a year ago. File Photo by John Angelillo/UPI | License Photo

May 27 (UPI) -- Inflation slowed slightly in April in the United States but it is still near a 40-year high. Income, disposable income and consumer spending all rose in April despite the ongoing inflation.

The Commerce Department Friday said in April the Personal Consumption Expenditures index increased 6.3% from a year ago. In March, that annual core inflation rate was 6.6%.

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Consumer spending, even in the face of continued inflation rose 0.9% in April.

"At least in the second quarter, consumers really had their purses wide open," said Kathy Bostjancic, chief U.S. economist at Oxford Economics. "We think eventually that's going to have limits. Right now we're all feeling pent-up and just need to travel. But come next year, it's a different story."

Personal income was up 0.4% in April. According to the Commerce Department, that increase was in both private and government wages and salaries.

Disposable income was also up slightly, rising by 0.3% in April.

Friday's Commerce Department report showed moderating gas prices in April helped nudge inflation down. But in recent weeks gas prices have risen again.

According to AAA, average national gas prices as of Friday morning were $4.59 per gallon for regular.

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Much of the inflation impact is in energy and food. When those are removed, the PCE inflation index for April would be 4.9%.

But savings in April were 4.4%, the lowest rate since September 2008, according to the Commerce Department's Bureau of Economic Analysis.

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