More and more statistics show how far inflation is making its way into American life. This is shown by the latest price gauge, released this morning, which just happens to be the one the Federal Reserve is paying the most attention to.
The personal consumption expenditure index (PCE) rose 5.7% annually last month, down from 5.1% in October, according to the US Bureau of Economic Analysis (BE A). Inflation began to climb in the spring, as supply bottlenecks and other pandemic reopening issues wreaked havoc on the economy. The year before, in November 2020, the annual PCE increase was only 1.1%, BE A records show.
The most known consumer price index (CPI) is expected to be released in the New Year, January 12, covering December. The most recent CPI reading, from the Bureau of Labor Statistics (BLS), was an annual increase of 6.8%.
The Fed, after initially hesitating to fight inflation, is now embarking on the reduction of its bond purchase program by March and next year by enacting up to three-quarters of a point. increase in the federal funds rate, which governs short-term interest rates.
The BEA report showed that American consumers are spending more on basic necessities, as prices rise. Spending on housing, utilities, gasoline and food increased in the past month.