A consumer price measurement used by the Federal Reserve to track inflation spiked again in June and hit its highest level since 1991, government data showed.
The personal consumption expenditures (PCE) price index increased 4% over the 12 months between July 2020 and June, according to a Bureau of Economic Analysis report released Friday. Excluding volatile energy and food prices, the index spiked 3.5% in that same 12-month period.
The index increased 0.5% in June, in line with economists’ forecasts, CNBC reported.
“Inflation has increased notably and will likely remain elevated in coming months before moderating,” Federal Reserve Board Chair Jerome Powell said during a press conference this week. “As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term.”
Federal Reserve Chairman Jerome Powell tried to calm lawmakers’ fears about rising inflation but also said it would probably remain elevated for months to come.
Testifying before Congress this week, Powell said the Federal Reserve was willing to step in to address the situation, but that inflation should level out next year.
“As always, in assessing the appropriate stance of monetary policy, we will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if we saw signs that the path of inflation or longer-term inflation expectations were moving materially and persistently beyond levels consistent with our goal,” Powell said in his prepared testimony.
Republican-led states and Vermont reported the lowest unemployment rates in April, according to a new report by the U.S. Commerce Department. States led by Democratic governors recorded the highest jobless rates, according to the report.
Unemployment rates were lower in April in 12 states and the District of Columbia and stable in 38 states, according to the U.S. Bureau of Labor Statistics.
States with the highest unemployment rates in April were Hawaii (8.5%), California (8.3%), New Mexico and New York (both at 8.2%), and Connecticut (8.1%). All five states with the highest unemployment are run by Democratic trifectas, meaning Democrats control the governor’s office and both houses of the state legislature.
Senate Banking Committee Republicans have expanded an investigation into regional Federal Reserve banks over their alleged “woke mission creep.”
Republicans on the Senate Banking Committee sent letters to regional Federal Reserve banks in Minneapolis, Boston and Atlanta demanding a briefing with leaders and documents related to a recent “Racism and the Economy” initiative, GOP staffers said during a press briefing Monday morning. Engaging in political advocacy is out of the Fed’s purview, the letters said.
“Of course, racism is abhorrent and has no place in our society…. I recognize the interest in studying economic disparities along demographic lines, such as race and gender,” Banking Committee Ranking Member Pat Toomey wrote in the letters sent Sunday.
Top American economist Larry Summers is sounding the alarm on rising U.S. inflation, saying that it is ticking up quicker than he originally expected.
Inflation is increasingly a more concerning and larger threat as consumer prices continue to rise, former National Economic Council Director and Treasury Secretary Larry Summers told Axios on Monday. He also criticized the Federal Reserve’s policies, suggesting that its decision to keep interest rates low could harm the economy.
“Data are pointing more towards higher inflation than I expected, and sooner,” Summers told Axios. “With more inflation signs sooner than I would have expected.”