In some good news for all of us, personal incomes are on the rise, edging up 0.3% last month, as the Commerce Department's latest report on personal incomes and expenditures showed this morning. The increase was the same as in July, as workers continued to make steady gains in another sign of the job market's resilience in the face of rising interest rates and recession worries.
However, the report also showed that prices for food and other items tracked in the Personal Consumption Expenditures (PCE) Price Index rose 0.3%, more than the 0.1% economists expected after a 0.1% decline in July. That decline had raised hopes that inflation would moderate.
The index was up 6.2% from a year ago, compared to a 6.4% gain in July as energy prices eased. Core PCE prices, which exclude more volatile food and energy costs, climbed 0.6% in August, and were up 4.9% from a year ago, accelerating from July's 4.7% year-over-year jump.
The PCE Price Index is the Federal Reserve's preferred gauge of inflation, as it more accurately reflects consumers' spending habits than the Consumer Price Index (CPI). The central bank will no doubt be weighing these results before its next policy meeting in November, when it will make another interest rate decision.
Rising prices support the Fed's hawkish stance on tightening policy, which could mean another super-sized rate hike of 75 basis points. That could help slow inflation but would also keep driving up the cost of borrowing for consumers like us.
Credit card data tracked by The Balance shows the average interest rate made a big jump in August as the Fed raises interest rates, and is now at 21.64%—the highest average annual percentage rate since we began recording them.
- Kara
0 comments:
Post a Comment