April 30 (UPI) — U.S. inflation finally hit the Federal Reserve’s 2 percent target last month — for the first time in six years, the Department of Commerce said Monday.
For years, the Fed has determined monetary policy based partly on the inflation level. The Federal Open Market Committee considers 2 percent the ideal inflation mark, because it’s typically a key indicator of strong economic health.
U.S. inflation hovered near the mark for years, but finally reached 2 percent in March. It was last at the 2 percent threshold in 2012. The Fed has projected inflation to be around 1.9 percent by the end of 2018.
Consumer prices, as measured by the personal consumption expenditures price index, jumped 2.0 percent year-on-year in March — the biggest gain since February 2017.
Purchases rose 0.4 percent from the prior month, the Commerce Department figures showed — but consumer spending grew at a 1.1 percent annualized rate between January and March, which was the slowest in nearly five years.
Personal incomes rose 0.3 percent in March, while wages and salaries advanced 0.2 percent — the smallest gain since October.
The department said Friday the U.S. economy grew by 2.3 percent during the first quarter of this year — a slower pace than the previous quarter.