"Left-leaning media coverage has in recent weeks pushed the narrative that inflation is fading. But shocking new inflation numbers released today blow that media spin to smithereens.
The Labor Department just released the latest Personal Consumption Expenditures index (PCE), which is the Federal Reserve’s preferred metric for monitoring inflation. It shows a 4.3 percent rise in consumer prices from August 2020 to August 2021, with prices rising 0.4 percent last month alone. That’s the biggest annual surge recorded since January 1991—roughly three decades ago.
Even when factoring out volatile food and energy prices, the PCE still shows a 0.3 percent monthly rise in consumer prices and a 3.6 percent year-over-year increase. That’s the highest on that metric since May 1991!
This all may sound like abstract economic data, but it translates to a real erosion of everyday Americans’ living standards and purchasing power. As economist and FEE fellow Peter Jacobsen has previously explained, rising inflation means “the average consumer making the same salary this year has taken a pay cut when you consider what their paycheck can actually buy.”
Even the Federal Reserve is starting to acknowledge, much belatedly, that these persistent levels of inflation are not just a “temporary” problem.
“It’s also frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse,” Fed Chair Jerome Powell said earlier this week. “We see that continuing into next year probably, and holding up inflation longer than we had thought.”
Link:
https://fee.org/articles/inflation-hits-30-year-high-according-to-this-key-metric/
