President Joe Biden got some bad news on the eve of the first presidential election: the government’s estimate of inflation in the first quarter of the year was revised higher.
The Bureau of Economic Analysis said that the personal consumption expenditure price index rose at an annual pace of 3.4 percent in the first three months of the year, far faster than the 1.8 percent recorded at the end of last year and up from the 3.3 percent estimated in the prior report issued in May.
The personal consumption expenditure (PCE) price index is used by the Fed as the yardstick for its two percent inflation target. The upward revision indicates that the surge of inflation as 2024 began was even worse than previously thought.
Core PCE prices, which exclude food and energy prices, rose by 3.7 percent, according to the new estimate. The previous estimate had core prices up by 3.6 percent. In the fourth quarter, core prices were up at a two percent annual rate.
The new inflation estimates were released Thursday as part of the government’s third estimate of economic growth in the first quarter.