Washington, Feb 26 US personal consumption expenditures (PCE), the Federal Reserve's preferred inflation measure, rose 6.1 per cent in January as compared to 2021, the Commerce Department reported.
The latest data is another reminder that inflation has been persistently high, which would warrant the Federal Reserve's expected rate hike on its March policy meeting.
PCE grew by 2.1 per cent in January from December 2021, and personal income edged up by less than 0.1 per cent in the month, according to estimates released by the department's Bureau of Economic Analysis.
The bureau noted that Covid-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country, and government social benefits decreased with the expiration of Covid-19 relief programs, Xinhua news agency reported.
"Another leg up in commodity prices" following the Ukraine crisis alongside the broad strength in January's consumer price data "have led us to (once again) raise our estimates for inflation this year," Sarah House, Senior Economist at the Wells Fargo Securities, said in an analysis.
"While it still seems plausible that inflation will peak on a year-over-year basis in February, the descent looks set to be much slower-going," she added.
House said that her team expects the core PCE deflator, which is currently up 5.2 per cent year-over-year, to still be up 4.1 per cent in the fourth quarter well above the Fed's target and most recent estimates.
The US central bank signaled in January that it is ready to begin a series of interest-rate hikes in March to combat surging inflation as it exits from the ultra-loose monetary policy enacted at the start of the pandemic.
Federal Reserve Bank of Cleveland President, Loretta Mester on Thursday said the central bank is on track to raise interest rates in March despite escalating geopolitical tensions over Ukraine.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor