US household spending was flat in March from the prior month, after advancing 0.1% in February. While consumer inflation remains well above the Fed’s 2% target, there are some indicators pointing to a slowdown in demand - which could ease some inflationary pressure. PPI is also a closely watched inflation gauge: Since the producer-centric index captures price shifts upstream of the consumer, it’s sometimes looked to as a potential leading indicator of how prices may eventually land at the store level - though that could take several months, Juneau said. Core inflation, which excludes food and energy prices, was unchanged at 5.5% for the 12 months ended in April.

That was the 10th consecutive month of slowing consumer inflation and the lowest reading since April 2021. The Consumer Price Index, which measures price changes across a basket of consumer goods, rose 4.9% in April, down from the 5% rise in March, the BLS reported Wednesday.

The Federal Reserve began to aggressively raise interest rates last year to slow demand and tamp down inflation and it has seen some progress since then.

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