The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, continued to surge in June, according to data released Friday by the Bureau of Economic Analysis.
The PCE index was up 6.8 percent for the year ending in June, an increase from 6.3 percent in both April and May, the BEA announced.
PCE is the Fed’s preferred measure of inflation because it is “just better at capturing the inflation that people actually face in their lives,” Fed chair Jerome Powell said Wednesday. The central bank endeavors to keep it at 2 percent.
The PCE price index excluding food and energy increased 4.8 percent from a year ago, up from 4.7 percent in May.
Another inflation measurement, the consumer price index, showed inflation at 9.1 percent year-over-year in June.
Like the CPI report, the PCE data released Friday suggests that inflation was higher in June than at any point in decades.
CPI places a higher emphasis on the prices of gasoline and residential rent, both of which have skyrocketed in recent months, according to Axios.
Typically, the gap between the two metrics is far narrower, averaging just 0.2 percent over the last decade. The widening spread could add volatility and confusion to the market, Axios added.
The report comes after the Fed announced on Wednesday it would be raising interest rates by 0.75 percent to combat inflation, and after the BEA announced Thursday that the U.S. gross domestic product had decreased for the second consecutive quarter, the conventional definition of a recession.
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