The Fed’s Favorite Inflation Measure Hits Three-Decade High

Money by Giorgio Trovato is licensed under Unsplash
The Federal Reserve’s preferred measure of inflation reached its highest level since 1991.

According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index — which the central bank uses to inform monetary policy decisions — hit a year-over-year rate of 4.1% in October.

Along with the surge in prices came an increase in the amount consumers spent, which rose 1.3% for the month, higher than the 1% estimate. That came with a 0.5% increase in personal income, which was well ahead of the 0.2% estimate.

Inflation continued to be reflected most in surging energy costs, which rose 30.2% from a year ago, while food prices increased 4.8% during the span. Services inflation gained 6.3%, the same as in September, while goods inflation jumped 7.3%, up from the 6.4% pace in the previous month.
Money by Giorgio Trovato is licensed under Unsplash