CNBC reports that the personal consumption expenditures price index rose at an annual rate of 4.4 percent in September, the highest since 1991. And that’s with the soaring food and energy costs taken into account.
Even without them, Western Journal reports, “year-over-year inflation hit the highest rate since May 1991 at 3.6 percent.” That “core” PCE index, which excludes energy and food, is the measure the Fed prioritizes in measuring inflation. Its yearly goal is two percent inflation
CNBC adds that “the headline inflation rate was pushed by a 24.9% increase in energy costs and a 4.1% gain in food. Services inflation rose 6.4% on the year while goods increased 5.9%” and also notes that average personal income has declined one percent, making the price increases seem even more onerous.
Nor has the jump in inflation led to a commensurate rise in GDP. Despite the 4.4% inflation rate, GDP is only growing at a 2% rate, with the Atlanta Fed predicting that we might have slowed to 0.2% growth and could even enter a contraction soon.
Yellen had this to say about inflation: “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. 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%.”
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