Holy cow! Two-thirds of Americans say beef, chicken prices have skyrocketed
Biden’s next big giveaway starts in July — will Congress finally start telling him ‘No’?
Larry Summers raises inflation concerns as he blasts Biden’s spending
Joe Biden is proving even more of a ‘master of disaster’ than Jimmy Carter
A key inflation indicator rose 3.1 percent in April from a year ago as costs continued to grow in the US economy just as it’s mounting a comeback from the pandemic, the feds said Friday.
It is the most since July 1992 that the core personal consumption expenditures index has risen over 12 months.
The so-called core PCE index, which excludes food and energy, rose 0.7 percent from March, the highest month-over-month rise since October 2001, the Commerce Department reported.
The index tracks prices across a variety of goods and services and is considered a broader measure for inflation than the Labor Department’s Consumer Price Index, which rose 4.2 percent in April from a year ago.
Including food and energy, which are more volatile than other goods, the Commerce Department’s index jumped 3.6 percent from a year ago and 0.6 percent from March.
Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, noted that the big year-over-year numbers are likely warped because at this time last year the pandemic shuttered large swaths of society, driving prices down.
She added that some of the price increases are probably temporary as the economy gets going over the next couple of months. But others, she warned, could be here to stay.
“Rise in prices of some of the underlying components like travel services, used motor vehicles, etc. could be transitory and reflective of pent-up demand, but there are others such as medical care services where the rebound might be more structural and worth keeping an eye on,” she said after the data came out.
She noted that some prices in housing goods like lumber and agricultural commodities have fallen in recent weeks, but the new data “will keep the inflation chatter alive and kicking for longer.”
Despite higher prices, Americans kept on spending.
Consumer spending rose 0.5 percent in April, much slower than the 4.7 percent gain in March, but that was partly fueled by federal stimulus checks, the report showed.
The report also showed a 13.1 percent drop in household income, which was likely driven down by the earlier burst of income caused by the latest round of $1,400 stimulus checks that came in March.
Despite that drop, many economists estimate that most Americans managed to squirrel away savings during the pandemic that will lead to a spending boost this summer.
But a variety of factors are causing problems for businesses that could hold back the recovery or drive prices even higher. A nationwide labor shortage has left many businesses short staffed and unable to operate at full capacity.
Other businesses have had trouble getting supplies delivered quickly enough to meet demand, in part because of labor tightness in trucking and transportation.
Share this article:
Source: Read Full Article