Inflation notches a fresh 30-year high as measured by the Fed’s favorite gauge
Annual inflation rose at its fastest pace in more than 30 years during September despite a decline in personal income, the Commerce Department reported Friday.
Headline price pressures as gauged by the personal consumption expenditures price index including food and energy increased 0.3% for the month, pushing the year-over-year gain to 4.4%. That’s the fastest pace since January 1991.
Stripping out food and energy costs, inflation rose 0.2% for the month, in line with the Dow Jones estimate, and 3.6% for the 12-month period, unchanged from August but good for the highest since May 1991. The Federal Reserve prioritizes the so-called core PCE reading among a battery of measures it uses for inflation.
The continued inflation jump came as personal income declined 1% in September, more than the expected 0.4% drop. Consumer spending increased 0.6%, in line with Wall Street estimates.
Earlier in the morning, Treasury Secretary Janet Yellen, a former Fed chair, said she still expects inflation to dissipate, though she and other officials have acknowledged that it has been more persistent and longer-lasting than expected.
“Year-over-year inflation remains high and will for some time simply because of what’s already happened in the first months of the year,” Yellen told CNBC from Rome and the G-20 summit. “But monthly rates I believe will come down in the second half of the year. I think we’ll see a return to levels close to 2%.”
Reference: CNBC
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