Data released by the U.S. Department of Commerce on Friday (29th) showed that as natural gas prices soared, the personal consumption expenditures price index (PCE) rose 6.8% in June to a 40-year high, another Federal Reserve (Fed) favored pass. The inflation indicator core PCE increased by 4.8% in June, higher than the market expectation of 4.7%, and the previous value was 4.7%.
The report shows that the PCE price index in June increased by 6.8% year-on-year, in line with market expectations, and the previous value was 6.3%. On a monthly basis, the PCE price index in June increased by 1% month-on-month, higher than the expected 0.9%, and the previous value was 0.6%. The core PCE price index rose 0.6% month-on-month, expected 0.5%, and the previous value of 0.3%.
With the surge in natural gas prices, the PCE price index in June rose 6.8% year-on-year, hitting a 40-year high. The monthly growth rate of the PCE price index in June increased from 0.6% in May to 1%, matching the largest monthly increase since 1981.
On the same day, consumer spending in June increased by 1.1% month-on-month. Although it was higher than market expectations of 0.9%, it was actually due to rising prices rather than increased consumer purchases. After adjusting for inflation, consumer spending increased by only 0.1%. %.
Another U.S. personal income rose 0.6% in June, beating market expectations of 0.5%, but inflation-adjusted disposable income fell 0.3%.
In another troubling sign that inflation is spreading across the economy, the U.S. Labor Department’s Employment Cost Index (ECI) rose 1.3% in the second quarter (April-June) on Friday, although it was slower than the third quarter. The 1.4% rate slowed in the first quarter, but the tightening labor market continues to drive wage growth, which is likely to keep inflation high for a while.
