Similarly, the travel-related accommodations and airfare sectors also contributed nearly 0.1 percentage point to month-over-month core PCE inflation. Prices in these categories are recovering from depressed values well below their pre-COVID levels.
Prices are expected to continue to rise amid renewed summer travel, but the natural limitations to making up spending on foregone travel are likely to result in a normalization of demand growth after a few quarters, and the capacity in these sectors will likewise increase from their depressed pandemic levels as hiring proceeds.