A key inflation indicator increased to its highest level in 38 years while consumer demand remained strong despite soaring prices, the Commerce Department announced Friday.
The Commerce Department’s personal consumption expenditure (PCE) index grew 5.2% in January, exceeding the 5.1% Dow Jones estimate, the Commerce Department reported. The PCE is the Federal Reserve’s preferred measure of inflation, and January’s figure marks monthly the largest year-over-year increase since April 1983.
The PCE increased 0.5% on a monthly basis in January, the same pace as the previous three months, according to the Commerce Department. Including food and energy prices, overall PCE surged 6.1% since January 2021, marking the most annual growth since February 1982.
A key economic index used by the Federal Reserve to measure inflation surged to another 30-year high in August as Americans continued to experience sticker shock.
The personal consumption expenditures (PCE) index increased 4.3% over the 12-month period ending in August, according to a Department of Commerce report published Friday. The figure represented the index’s highest increase since January 1991 when it surged at an annual rate of 4.5%, government data showed.
Minus energy and food prices, which are notoriously more volatile than other sectors, the PCE index increased at an annual rate of 3.6% in August, the Commerce Department reported. That is also the highest increase in more than 30 years.
A key measurement of consumer spending and personal income showed the economy experienced higher-than-expected inflation in April, according to the Department of Commerce.
The Personal Consumption Expenditures (PCE) price index — a main inflation indicator used by the Federal Reserve that measures consumer price increases — ticked up by 0.6% while the core PCE index, which excludes food and energy, increased 0.7% in April, the Commerce Department reported Friday. The Disposable Personal Income index, which measures how much after-tax income Americans have — decreased by 14.6%, or $3.22 trillion.
Economists had expected the PCE measure to come in lower than it did, CNBC reported.