Inflation hit the highest rate in 30 years in the gauge favored by the Federal Reserve, further fueling inflationary fears.
The core personal consumption expenditures price index increased by 4.3% on an annual basis and 0.4% for the month of August, according to data released by the Bureau of Economic Analysis on Friday morning.
Core PCE inflation, which strips out energy and food prices, rose at a 3.6% annual rate.
The numbers are well above the central bank’s target of 2% and add credence to Fed detractors’ calls for it to begin tapering its asset purchases and ultimately raise interest rates from their near-zero levels.
Fed leaders have consistently said they expect inflation to cool down as the United States continues to return to normal amid the pandemic. PNC Chief Economist Gus Faucher said the numbers bear out the notion that inflation is slightly slowing.
“Monthly inflation, although higher than it was before and during the recession, has slowed in July and August,” Faucher said after the data were released on Friday. “The year-over-year numbers obscure the fact that inflation has actually slowed on a month-to-month basis.”