WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge rose last month at its fastest pace since June, an alarming sign that price pressures remain entrenched in the U.S. economy and could lead the Fed to keep raising interest rates well into this year.
Friday’s report from the Commerce Department showed that consumer prices rose 0.6% from December to January, up sharply from a 0.2% increase from November to December. On a year-over-year basis, prices rose 5.4%, up from a 5.3% annual increase in December.
Excluding volatile food and energy prices, so-called core inflation rose 0.6% from December, up from a 0.4% rise the previous month. And compared with a year earlier, core inflation was up 4.7% in January, versus a 4.6% year-over-year uptick in December.
The report also showed that consumer spending rose 1.8% last month from December after falling the previous month.
January’s price data exceeded forecasters’ expectations, confounding hopes that inflation was steadily decelerating and that the Fed could relent on its campaign of rate hikes. It follows other recent data that also suggested that the economy remains gripped by inflation despite the Fed’s strenuous efforts to tame it.
Paul Plante says
Hasn’t anybody in Washington, D.C. figured out that the Fed is actually fighting the Biden administration, which is the on-going source of the inflation the Fed is trying to fight, as the Biden administration continues to POUR tens of BILLIONS of borrowed dollars into an overheated economy?
The Biden administration is “creating” what are in essence high-paying WPA jobs, all paid for by borrowed money, and the Fed is raising interest rates to try to cool the red-hot labor market Joe Biden has created with taxpayer money.
It’s positively insane like everything else associated with Joe Biden.
Consider Joe’s October 19, 2022 FACT SHEET: Biden-Harris Administration Driving U.S. Battery Manufacturing and Good-Paying Jobs, to wit:
The Bipartisan Infrastructure Law, CHIPS & Science Act, and Inflation Reduction Act combined will invest more than $135 billion to build America’s electric vehicle future, including critical minerals sourcing and processing and battery manufacturing.
I remember well the 1970s and the wage-price spiral that caused Paul Volker of the Fed to raise interest rates all the way to 20% to stop the runaway inflation back then.
Will we have to repeat that experience again?
I certainly think so, so stay tuned, and rest assured, you’ll all be among the first to know if and when that happens.