Consumer spending in April indicates still-high inflation 

A key index of U.S. prices ticked higher in April, and consumer spending rebounded, a sign that inflationary pressures in the economy remain high, the Associated Press reports.

The index, which the Federal Reserve closely monitors, showed that prices rose 0.4% from March to April. That was much higher than the 0.1% rise the previous month. Measured year over year, prices increased 4.4% in April, up from 4.2% in March. The year-over-year figure is down sharply from a 7% peak last June but remains far above the Fed’s 2% target.

Today’s report from the government showed that despite rising prices, consumers remain buoyant. Their spending jumped 0.8% from March to April, the biggest increase since January. Much of the increase was driven by spending on new cars, which soared 6.2%. Among other items, Americans also bought more computers, gasoline, and clothing.

Despite longstanding predictions of a forthcoming recession, Friday’s data underscores the U.S. economy’s surprising resilience. At the same time, the persistence of high inflation is complicating the Federal Reserve’s interest rate decisions.

Another sign that the economy remains solid came in a separate report today. It showed that a measure of businesses’ investment in durable factory goods jumped 1.4% in April — evidence that companies have continued to spend despite higher inflation and borrowing costs given still-steady consumer demand.

The inflation gauge that was issued today, called the personal consumption expenditures price index, is separate from the government’s better-known consumer price index. The government reported earlier this month that the CPI rose 4.9% in April from 12 months earlier.