PCE Price Index Jumps to 40-Year High

As is often pointed out, the Federal Reserve prefers to follow the Personal Consumption Expenditures price index for its inflation figure rather than the Consumer Price Index.

Today we learned that the PCE price index increased by 6.76% in the 12 months ending in June. That’s the steepest increase in 40 years.

The CPI and PCE had been showing a divergence. The PCE increases had peaked in March. That is, until we got today’s report for June.

The core PCE price index is up 4.79% over the last year. That’s still below its peak of 5.31% which is hit in February.

In single-month terms, PCE was up 0.95% in June while the core rate was up 0.59%.

Posted by on July 29th, 2022 at 12:37 pm


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