Inflation unexpectedly accelerated in August, as shortages of a wide range of consumer goods and services drove up prices.
The Personal Consumption Price Index for August increased 4.3 percent from one year ago, reflecting increases in the prices paid by consumers for both goods and services, Commerce Department data showed Friday. That is the fastest pace of inflation since January 1991.
Energy prices increased 24.9 percent from the depressed levels of a year ago. Food prices jumped 2.8 percent.
Core PCE prices, excluding food and energy, rose 3.6 percent compared with a year ago. That is also the fastest pace since 1991.
Compared with a month earlier, the PCE Price Index rose four-tenths of a percentage point. Analysts had forecast a three-tenths gain, which would have represented a one-tenth of a point slowdown from the July figure.
Core prices rose three-tenths of a point from July, matching the previous months gain and above the consensus forecast for two-tenths.
Inflation picked up for both goods and services. The index for goods rose 5.5 percent compared with a year ago, up from 5.3 percent in July. Durable goods prices jumped seven percent, up from 6.9 percent in the prior month. Prior to May and June of this year, inflation in durable goods has not run this hot since 1981. Nondurables rose 4.6 percent, up from 4.4 percent.
Services prices rose 3.6 percent, up from 3.5 percent. That is the fastest rate of inflation in services since 2006.
Speaking on a panel organized by the European Central Bank Wednesday, Federal Reserve Chairman Jerome Powell said he still expects inflation to ease eventually, but now expects high inflation to run into 2022. This spring Powell had declared high inflation would be transitory, which many Fed watchers understood to mean lasting just a few months.
“It’s also frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse,” he added. “We see that continuing into next year probably, and holding up inflation longer than we had thought.”
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