(Daily Caller News Foundation) — The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, continued to surge in June, according to data released Friday by the Bureau of Economic Analysis (BEA).
The PCE index was up 6.8% for the year ending in June, an increase from the 6.3% that it was at in both April and May, the BEA announced. PCE is the Fed’s preferred measure of inflation because it is “just better at capturing the inflation people actually face in their lives,” and the central bank endeavors to keep it at 2%, Federal Reserve Chair Jerome Powell said Wednesday.
The PCE price index excluding food and energy increased 4.8% from a year ago, and up from 4.7% in May.
Another inflation measurement, the Consumer Price Index (CPI), was released on July 13, and reported inflation at 9.1% year-over-year in June. While the PCE is the metric the Fed tracks most closely, it is released a couple weeks after CPI each month, which is more widely followed by the general public.
Like the CPI report, PCE data released Friday suggests that inflation was higher in June than at any point in decades.
CPI places a higher emphasis on prices of gasoline and residential rents due to how its equation is calculated, both of which have skyrocketed in recent months, according to Axios.
Typically the gap between the two metrics is far narrower, averaging just 0.2% over the last decade, and the widening spread could add volatility and confusion to the market, Axios added.
The report comes after the Federal Reserve announced it would be raising interest rates by 0.75% on Wednesday to combat inflation, and after the Bureau of Economic Analysis announced Thursday that U.S. gross domestic product (GDP) decreased for the second consecutive quarter, the conventional definition of a recession.