On Friday’s broadcast of Bloomberg’s “Balance of Power,” White House Council of Economic Advisers Chair Jared Bernstein reacted to the April Personal Consumption Expenditures (PCE) index by stating there has been a consensus that “the kind of stall in disinflation in Q1 of this year looked like it was probably anomalous factors, some residual seasonality” that “the forces of disinflation that helped us so much in the second half of this year” are still in place.
Bernstein said, “I think the consensus among many was that the kind of stall in disinflation in Q1 of this year looked like it was probably anomalous factors, some residual seasonality, and that the prints for April, whether it’s CPI or PCE, have been more on track, as you just said. That’s very welcome news, but it’s just one month. So, both we, and certainly central banks, including the one you were just talking with, need more confidence in that forecast. But the forces of disinflation that helped us so much in the second half of this year, I think they’re still in place.”
Later, he added that there is a “lot more work to do on the price side. Prices are still too high, and we have an aggressive cost-cutting agenda that we’re going to continue to push.”
The report showed year-over-year rate for overall and core PCE holding steady from the month before at 2.7% and 2.8% respectively. And month-over-month for overall PCE rate at 0.3%, the same as it was the month before, while month-over-month for core dropped from 0.3% in April to 0.2% in May.
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