**MNI DATA IMPACT:US April Core PCE Prices +0.2%; Y/Y +1.6%>

By Harrison Clarke

     WASHINGTON (MNI) - The core PCE price index posted a 0.2% gain in 

April, as expected by both a Bloomberg survey and an MNI survey, data 

released Friday by the Commerce Department showed. 

     The core PCE price index was up 1.6% year/year in April, a slightly 

faster pace than the 1.5% year/year gain now reported in March. The 

increase in April core prices keeps the rate below the 2% target set by 

the Federal Reserve. 

     Here are some of the key factors from the data release on Friday: 

     - Personal income was up 0.5% in April, above the 0.3% gain 

expected by both the Bloomberg consensus and the MNI survey. Personal 

income was unrevised from the 0.1% gain in March. Wages and salaries 

were up 0.3%. There were also income gains for personal income receipts 

on assets and personal current transfer receipts. 

     - Current dollar PCE was up 0.3% in March, compared with 

expectations for a 0.2% gain by an MNI survey and a 0.3% gain by the 

Bloomberg consensus. The increase was the result of a 0.7% increase in 

nondurable goods spending, despite a 0.8% decrease in durable goods. 

This was accompanied by a 0.3% gain in services spending. 

     - Real PCE posted a flat reading in April after a 0.9% gain in 

March. Real durables PCE was down 0.4% and real nondurables rose 0.3% in 

the month. There was also a 0.1% decline in real services spending. 

     - The overall PCE price index was up 0.3% in April after a 0.2% 

increase in March. The year/year rate was 1.5%, a rebound from the 1.4% 

rate in March. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]