An inflation gauge that is closely tracked by the Federal Reserve jumped 6.8% in June from a year ago, the biggest increase in four decades, and leaving Americans with no relief from surging costs.
WASHINGTON — Inflation eased last month as energy prices tumbled, raising hopes that the surging costs of everything from gasoline to food may have peaked.
There was hope that the Fed might signal a moderation in rate increases if inflation were to show further signs of easing. In the United States, the Commerce Department’s personal consumption expenditures index is less well known than the Labor Department’s consumer price index .But the Fed prefers the PCE index as a gauge of inflationary pressures, partly because the Commerce index attempts to measure how consumers adjust to rising prices by, for example, substituting cheaper store brands for pricier name brands.CPI has been showing higher inflation than PCE; Last month, for instance, CPI was running at an 8.
“The American people are starting to get some relief from high prices, and the Inflation Reduction Act that I signed last month will also help bring prices down,” Biden said Friday. “Gas prices decreased every day this summer – the fastest decline in over a decade. And, today’s report showed that personal income was up last month as well.”
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