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The Federal Reserve's favored measure of inflation grew more slowly last month, but remained above the central bank's 2% target.
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The U.S. economy accelerated at the start of 2026, expanding at a modest 2% pace from January through March.
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In the fourth quarter, consumer spending grew at a 2% clip, down from 3.5% in the third quarter.
Economics
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However, inflation remains higher than the Federal Reserve would like.
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Federal government shutdowns usually don’t leave much economic damage. But the one that started Wednesday looks riskier.
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Seeking to bolster the job market, the Fed last week cut its benchmark interest rate for the first time since December.
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Consumer spending, which accounts for about 70% of U.S. economic activity, accelerated to a 3.5% annual pace last quarter.
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Consumer spending, which accounts for about 70% of U.S. economic activity, accelerated to a 3.7% annual pace last quarter.
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Economists had expected a weaker 1.9% annual pace of growth.
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The economy got a boost last quarter from resilient consumer spending and the restocking of supplies by businesses.