Saturday, November 02, 2024
Advertisement
  1. You Are At:
  2. News
  3. World
  4. Key US inflation measure posts biggest increase since 1992

Key US inflation measure posts biggest increase since 1992

The so-called core personal consumption expenditure price index, the Fed's preferred inflation measure, jumped 3.4 per cent in May from a year ago, the largest 12-month increase since April 1992, Xinhua news agency quoted the Dept as saying on Friday.

Edited by: IANS Washington Published on: June 26, 2021 14:13 IST
personal consumption expenditure, price index, United States, inflation, INFLATION measure, biggest
Image Source : AP/ REPRESENTATIONAL.

Key US inflation measure posts biggest increase since 1992.

 

 

A key US inflation measure closely watched by the Federal Reserve posted its biggest year-on-year increase in May since 1992, indicating rising inflation pressures with the reopening of the economy, the Commerce Department reported .

The so-called core personal consumption expenditure (PCE) price index, the Fed's preferred inflation measure, jumped 3.4 per cent in May from a year ago, the largest 12-month increase since April 1992, Xinhua news agency quoted the Department as saying on Friday.

Including volatile food and energy prices, the headline PCE price index rose 3.9 per cent from a year earlier, the fastest annual pace since August 2008, well above the Fed's inflation target of 2 per cent.

"Many of the increases we are currently seeing will play out as we move into the summer months when the effect of a sharp drop in prices a year ago dissipates. The remainder will intensify debate within the Fed about when to taper asset purchases and hike rates," Diane Swonk, chief economist at Grant Thornton, a major accounting firm, said Friday in a blog.

"Faster than expected inflation figures have made many within the ranks of the Federal Reserve more nervous about rate hikes," Swonk said, adding seven out of 18 Fed officials are now expecting to raise rates at least once in 2022.

But Fed Chair Jerome Powell said on Tuesday that the central bank would not raise interest rates preemptively based on inflation fears, reiterating recent inflation surge is transitory.

"We will not raise interest rates preemptively because we think employment is too high, because we fear the possible onset of inflation. Instead, we will wait for actual evidence of actual inflation or other imbalances," Powell told lawmakers at a hearing before the House Select Subcommittee on the Coronavirus Crisis.

Also Read: Rising world food prices causing concerns among people: IMF

Also Read: India is 'incredibly important' partner to United States in the region and globally: White House

Advertisement

Read all the Breaking News Live on indiatvnews.com and Get Latest English News & Updates from World

Advertisement
Advertisement
Advertisement
Advertisement