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The US Federal Reserve’s annual inflation gauge hit a 30-year high in September, Commerce Department data showed on Friday, keeping the pressure up on the central bank’s policy makers as well as the Biden administration in reigning in surging costs.
The Personal Consumption Expenditures Price Index expanded by 4.4% from September 2020. That was the highest annual growth for a month in PCE’s core reading since 1991.
The core PCE index, which excludes volatile food and energy prices, remained unchanged at 3.6% year-on-year in September. The Fed tends to pay closer attention to the core PCE index when deciding on monetary policy, though the growth there was also the highest in 30 years.
The Commerce Department said consumer spending, which accounted for 70% of all US economic activity, grew by a dormant 0.6% as well in September.
The US economy shrank by 3.5% for all of 2020 due to shutdowns and other disruptions caused by the coronavirus pandemic. Growth this year has been spotty, with an annualized 3.5% expansion in the first quarter, 3.6% in the second and 2.0% in the third.
The Fed envisions a 6.5% expansion for all of this year, although some officials at the central bank have more ambitious expectations, forecasting growth of up to 7.0%.
The problem for the Fed though is inflation as wages and the prices of almost everything, from coffee to oil and building materials, have soared from the lows of the pandemic. (ANI/Sputnik)
( With inputs from ANI )
