Fed's favorite inflation gauge rises faster than expected in March

An inflation measure closely watched by the Federal Reserve rose faster than expected in March as high prices continue to weigh on millions of Americans.

The personal consumption expenditures index showed that consumer prices rose 0.3% from the previous month, according to the Labor Department, in line with expectations. On an annual basis, prices climbed 2.7% – higher than both the 2.6% forecast from LSEG economists and the 2.5% reading recorded the previous month.

In another sign that progress on inflation is stalling, core prices – which strip out the more volatile measurements of food and energy – climbed 0.3% from the previous month and 2.8% from the previous year. Those figures are both higher than what was seen the previous month.

"Progress on inflation certainly appears stalled. Prices grew in March at the same relative pace as in February," said Elizabeth Renter, data analyst at NerdWallet. "The good news is this: They didn’t further accelerate. The not great news: If you’re waiting for the Fed to cut rates, and you still haven’t pulled up a seat, get comfortable."