Consumer goods and services cost Americans 6.4 percent more than a year prior in February, the latest data from the U.S. government showed on Thursday.
The personal consumption expenditure price index rose by more than expected and indicated that inflation accelerated from the six percent annual rate in January. This was the fastest rate of price increases since 1982.
The Fed prefers the PCE price index because it covers a broader range of goods and services and accounts for consumers substituting cheaper goods or services when prices rise on premium versions.
Core PCE inflation, which excludes food and energy prices, rose by 5.4 percent compared with a year ago. This is the measure that the Federal Reserve uses for its annual two percent inflation target. This is the fastest pace of core price hikes since 1983.
The data show that inflation has shifted from durable goods to services and nondurable goods. Nondurable goods prices were up 1.8 percent, services prices rose 0.3 percent, and durable goods prices were flat.
Food prices jumped 1.4 percent and energy prices soared 3.7 percent compared with January.
COMMENTS
Please let us know if you're having issues with commenting.