Published On: Fri, Jun 25th, 2021

Core Consumer Price Inflation Soars to Levels Not Seen Since 1992

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Consumer prices, excluding the volatile food and energy components, soared well beyond the Federal Reserve’s 2 percent target in the year to May, reaching levels not seen in nearly 30 years and reinforcing inflation concerns. The so-called core personal consumption expenditures (PCE) price index, which excludes food and energy and is the Fed’s preferred method for gauging inflation, rose 3.4 percent in the 12 months to May, after rising 3.1 percent in the year to April, the Commerce Department said on Friday. The last time the core PCE inflation gauge saw a similar year-over-year vault was in April 1992. The Fed looks to core PCE as the key inflation gauge that informs its monetary policy, which has an inflation target of a longer-run average of 2 percent. Fed officials have repeatedly said they believe the current bout of spiking prices is transitory as they continue to tolerate inflation running hot in the shorter …

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