Oct 1, 2021 - Economy & Business

Key inflation gauge rose faster than expected in August

Federal Reserve Chair Jerome Powell during a congressional hearing in September 2021.
Federal Reserve Chair Jerome Powell during a congressional hearing in September 2021. Photo: Al Drago/Bloomberg via Getty Images

The price of goods and services rose 0.3% in August for a second straight month, slightly faster than the 0.2% expected, according to the core personal consumption expenditures (PCE) price index released Friday.

Why it matters: The measure, which grew 3.6% year-over-year, is the primary way the Federal Reserve watches for inflation.

The big picture: The Fed hinted last month that it could start to wind down its pandemic stimulus programs as soon as November.

What they're saying: Fed chair Jerome Powell said this week that high inflation, driven by supply chain problems, could last longer than officials had anticipated, the Wall Street Journal reported.

  • The Fed projected in June that core PCE inflation would grow 3.0% in 2021.
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