Fed’s Ideal Inflation Measure Rises, Claims at 45 Year Low

The personal consumption expenditures price index rose +1.8% in February from a year earlier, an increase last matched 12-months ago.

The rise in annual inflation, which comes after the inflation rate held at 1.4% for several months last summer, is the latest sign of strengthening inflation pressures that could encourage the Fed to continue raising interest rates this year.

The core-version (ex-food and energy) also strengthened, increasing +1.6% y/y.

Despite evidence of firming inflation stateside, the headline PCE price index remains below the Fed’s +2% target for annual inflation.

U.S jobless claims decline to its lowest level in 45-years

U.S filings for unemployment benefits unexpectedly fell last week to the lowest level since January 1973, further evidence that the labor market remains tight, Labor Department figures showed Thursday.

Highlights of Jobless Claims (Week ended March 24)

  • Jobless claims decreased by -12k to +215k vs. +230k (e)
  • Continuing claims rose by +35k to +1.87m in week ended March 17
  • Four-week average of initial claims fell to +224.5k from the prior week’s +225k.
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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell