Yet another inflation metric jumped in July, further debunking claims that inflation is in the rear-view mirror and reinforcing Federal Reserve Chairman Jerome Powell’s remarks earlier this month that additional interest rate hikes would be needed.
The latest Personal Consumption Expenditures (PCE) price index print released Thursday was in-line with expectations which were higher than previous reads.
Headline PCE inflation showed an increase of 3.3 percent year-over-year and Core PCE inflation — excluding volatile food and energy prices — increased 4.2 percent in the last year.
Compared to the previous release, headline and core PCE inflation increased 3.0 percent and 4.1 percent, respectively, showing that price increases continue to trend in the wrong, more expensive, direction. The July report also (again) debunks President Joe Biden's wishful claims that inflation is "down."
More on how prices increased in July from the Bureau of Economic Analysis:
From the preceding month, the PCE price index for July increased 0.2 percent (table 9). Prices for goods decreased 0.3 percent and prices for services increased 0.4 percent. Food prices increased 0.2 percent and energy prices increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.
From the same month one year ago, the PCE price index for July increased 3.3 percent (table 11). Prices for goods decreased 0.5 percent and prices for services increased 5.2 percent. Food prices increased 3.5 percent and energy prices decreased 14.6 percent. Excluding food and energy, the PCE price index increased 4.2 percent from one year ago.
The PCE price index is the Federal Reserve's preferred inflation gauge, so more movement in an upward direction — especially when, since Biden took office, prices are up more than 16 percent — makes it more likely that interest rates will again be increased by the Federal Open Market Committee (FOMC).
Interest rates have already been hiked to the highest level seen since the financial crisis of 2008, paralyzing the housing market by making it so buyers can't afford to buy, sellers can't afford to sell, and new homeowners are stuck in high-rate mortgages with little hope of reducing their payments in the near future, as Townhall reported previously.
"Inflation is accelerating again, revealing the fight against Bidenflation is far from over," noted Job Creators Network President and CEO Alfredo Ortiz. "Rising inflation is reducing American living standards and making it more difficult for ordinary small businesses to remain profitable," he explained.
"The PCE, which is the Federal Reserve's favorite inflation indicator, remains more than 50% higher than the Fed's target rate," of just 2.0 percent," continued Ortiz. "Stubbornly accelerating inflation makes it more likely that the Fed will raise interest rates again, exacerbating the credit crisis facing small businesses. Due to Bidenflation, small businesses and ordinary Americans face a one-two punch of runaway prices and far higher borrowing costs," he added.