The Federal Reserve’s preferred inflation gauge accelerated in August, keeping the pressure on economic policymakers at a time when many are watching warily as supply chain issues and commodity costs threaten to keep price gains elevated for longer than they had expected.
The Personal Consumption Expenditures index climbed by 4.3 percent in the year through August, up from 4.2 percent in the year through July and the fastest pace of increase since 1991. The monthly index also remained elevated, climbing by 0.4 percent for a second straight month.
The data come as economists regard the horizon with apprehension. Factory shutdowns in Asia continue to ripple through the global supply chain. Commodity costs, including those for oil and gas, are rising. Rents are rebounding at a breakneck pace after a pandemic swoon, threatening to push housing inflation — an important part of the overall price index — higher.
Officials at the Fed are watching those trends themselves, and while they say that they still expect inflation to fade, they acknowledge that the process is taking longer than they had expected or hoped.
It is “frustrating to see the bottlenecks and supply chain problems not getting better — in fact, at the margin, apparently getting a little bit worse,” Jerome H. Powell, the Fed’s chair, said while speaking on a panel on Wednesday. “We see that continuing into next year, probably, and holding inflation up longer than we had thought.”
Inflation and supply issues also pose a headache for President Biden’s White House, as rising costs chip away at voters’ paychecks and as houses and cars prove sharply more expensive and difficult to buy.
Republicans have blamed the jump in prices on government spending. The acceleration has come in part because supply has not been able to adjust rapidly enough to meet the demand that huge amounts of pandemic-era stimulus helped to unleash.
They’re also invoking inflation to bludgeon the administration’s plans for additional outlays.
Bryan Steil, a Republican representative from Wisconsin, quizzed Janet Yellen, the Treasury secretary, about how spending and the debt path might affect inflation going forward during a hearing on Thursday. He also asked Mr. Powell, who was testifying alongside Ms. Yellen, for the Fed’s plan for dealing with rapid price gains.
“Regardless of what the White House press team says, I think people are really seeing the impact of higher prices, day in, day out,” Mr. Steil said, later suggesting that “runaway spending” in Washington would increase consumer inflation expectations.
Friday’s P.C.E. data is in line with Consumer Price Index figures, a separate inflation index. That report has also jumped sharply in 2021, climbing at 5.3 percent in the year through August.
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