(Updates with release of PCE data)

May 31 (Reuters) - The U.S. Federal Reserve held its

benchmark overnight interest rate steady in the 5.25%-5.50%

range at its April 30-May 1 policy meeting.

Policymakers remain uncertain about the timing of a first

rate cut and say they want to see more data confirming that

inflation will fall, even if slowly.

Among the key statistics they are watching:

INFLATION (PCE released May 31; next release CPI June 12):

The personal consumption expenditures price index rose

2.7% in April, matching the rise in March. Core prices, stripped

of volatile food and energy costs, rose 2.8%, also the same as

the month before.

The Fed uses the

PCE index

to set its 2% inflation target, and the April report keeps

alive the concern mentioned by some policymakers that inflation

may get lodged at a rate too far above target to ignore.

But there was some glimmer of progress. On a

month-to-month basis the core index rose 0.2% in April versus

0.3% in the prior month, beating analysts' expectations. There

were also signs of slowing demand, with real spending and real

disposable personal income both dropping slightly, a possible

precursor to a further easing of price pressures.

The separate index of consumer prices rose more slowly than

anticipated in April, a respite from three months of prices

rising faster than policymakers expected. The headline consumer

price index rose at a 3.4% annual pace versus 3.5% in March,

while the rate was 3.6% in April after excluding food and energy

compared to 3.8% "core" inflation in the prior month.

None of the recent data has been enough for Fed

officials to declare they have regained confidence inflation is

on its way down.

RETAIL SALES (Released May 15; next release June 18):

Consumer spending flatlined in April, and downward revisions

to earlier data pointed to the sort of slowing demand Fed

officials have said may be needed to finish their inflation

fight.

The unchanged retail sales reading for April comes after

unexpectedly strong spending led Fed officials to counsel

patience before any rate cuts, and argue that the full impact of

prior rate hikes had not yet had its full effect on the economy.

EMPLOYMENT (Released May 3; next release June 7):

U.S. firms added 175,000 jobs in April, fewer than expected

and a rare drop below the average pace of 183,000 seen before

the COVID-19 pandemic. Average job growth in recent months

remains above 240,000, and the unemployment rate in April, at

3.9%, remained below 4% for the 27th straight month.

But while the figure remains healthy, the decline will be

welcomed by Fed officials as evidence the job market is coming

into better balance, countering a run of recent data that

prompted talk of a reaccelerating economy.

Fed officials have become more comfortable with the idea

that continued strong job growth could still allow inflation to

fall, especially if the supply of labor keeps growing and wage

growth eases. Both did in April: Workforce growth was a modest

87,000. But the annual pace of wage growth fell to 3.9%, the

slowest since June 2021 and edging closer to the 3.0%-3.5% range

that most policymakers view as consistent with the Fed's

inflation target.

JOB OPENINGS (Released May 1, next release June 4)

Fed Chair Jerome Powell has kept a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and particularly on the number of job openings

available to each person who is without a job but looking for

one. The ratio fell in March to 1.32, the lowest level since the

summer of 2021 and nearing the 1.2-to-1 level seen before the

health crisis.

Other aspects of the survey, like the quits rate, also have

edged back to pre-pandemic levels in what Fed officials view as

a balance between supply and demand emerging in the labor market

overall.