Inflation pressure eases in the US

By THIS IS MONEY
Updated:

 

INFLATIONARY pressures in the United States eased in April as personal incomes rose at the fastest pace in five months, the Commerce Department said.

While Americans' personal incomes increased 0.6% last month, spending rose 0.3%, the agency said.

Each figure was 0.1 percentage point stronger than the expectation of Wall Street economists surveyed by CBS MarketWatch.

The calmer inflation figures aren't likely to stop the Federal Open Market Committee raising rates at the policy-setting panel's June meeting, but they could signal that inflationary pressures are not as out of control as some of Wall Street's inflation hawks fear.

'Fed officials will probably take some comfort in these inflation readings,' said John Ryding, chief market economist for Bear Stearns. 'For now, therefore, the Fed probably remains committed to a gradualist path for interest rate rises.'

In the eurozone, however, inflation leapt from 2% to 2.5% - its highest for more than two years - in April as soaring oil drove up prices.

The bad news was compounded by a European Commission survey showing consumer sentiment in the region sank to its lowest this year. Business morale also fell.

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