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US-INFLATION-INDICATOR-PCE
Key US inflation measure hits 6-year high in July, up 2.3%
WASHINGTON, Aug 31, 2018 (BSS/AFP) – A key measure of annual US inflation
rose last month at the fastest pace seen in six years, pushed by rising
energy costs, the Commerce Department reported Thursday.
The Federal Reserve’s preferred price index, based on consumer spending,
rose 2.3 percent in the 12 months ended in July, according to the monthly
data, which was the strongest rate since March 2012.
Excluding volatile food and energy prices, the inflation rate also
accelerated, rising to 2.0 percent, which hits the Fed’s goal.
With the US economy growing at a brisk pace of 4.2 percent in the second
quarter, and unemployment rate at historic low levels, the central bank is
watching closely for signs prices are accelerating.
However, Fed officials have said they can tolerate inflation a little
above or below the target. The Fed has raised the key lending rate twice this
year, and is expected to hike again in September and December.
Energy goods and services surged 13.4 percent compared to July 2017, while
goods prices rose only 1.4 percent.
The Personal Consumption Expenditures price index rose just 0.1 percent in
July compared to June, and was up 0.2 percent excluding food and energy.
Personal income increased 0.3 percent or nearly $55 billion, while
spending jumped 0.4 percent or $49 billion, according to the report.
BSS/AFP/HR/1005