Fed’s Preferred Inflation Gauge Increases
Summary from the AllSides News Team
The Federal Reserve’s preferred means of tracking inflation rose in January, defying some experts’ expectations.
The Details: The Personal Consumption Expenditures price index rose 5.4% in the 12 months ending in January, higher than December’s 5.3%. In January alone, the measure indicated a 0.6% increase in prices, higher than December’s 0.2%. January’s Consumer Price Index, the common inflation benchmark, rose 0.5% from the month before and 6.4% annually.
For Context: The news was described by some headlines as “surprising.” Some experts, like JPMorgan Chase CEO Jamie Dimon, recently appeared less trusting of the Fed’s ability to rein in inflation than they were a month ago, when December’s low inflation numbers led to a more optimistic outlook. Without progress on limiting inflation, the Fed will likely continue raising interest rates to slow down borrowing and other economic activity.
How the Media Covered It: Coverage was common across the spectrum, particularly in business outlets. Most coverage was fairly similar, noting that price increases appeared to resist the Fed’s efforts. On its homepage, Washington Examiner (Lean Right bias) framed the news as “Bad news for Biden.”
Featured Coverage of this Story
From the Left
Inflation surprisingly rose in January, according to the Fed’s preferred gauge
The Federal Reserve’s preferred inflation gauge heated up unexpectedly in January, showing the continued strength of the US economy – and that rising prices won’t be so easily defeated.
Inflation picked up speed in January as the Personal Consumption Expenditures price index rose 5.4% in January from a year earlier, the Commerce Department’s Bureau of Economic Analysis reported Friday. In December, prices rose 5.3% annually.
In January alone, prices were up 0.6% from the prior month, a higher monthly gain from December’s increase of 0.2%.
From the Right
Inflation rose to 5.4% in January, according to key gauge watched by Fed
Inflation unexpectedly rose to 5.4% annually in January, as measured by the gauge favored by the Federal Reserve.
The rise in the personal consumption expenditures price index reported Friday morning by the Bureau of Economic Analysis is another sign that inflationary pressures are not abating in the face of the Federal Reserve’s campaign to slow price gains by hiking interest rates. Inflation is still running much hotter than the central bank’s target and damaging household purchasing power.
From the Center
Key Fed inflation measure rose 0.6% in January, more than expected
A measure the Federal Reserve watches closely to gauge inflation rose more than expected in January, indicating the central bank has more work to do to bring down prices.
The personal consumption expenditures price index excluding food and energy increased 0.6% for the month, and was up 4.7% from a year ago, the Commerce Department reported Friday. Wall Street had been expecting respective readings of 0.5% and 4.4%.
Including the volatile food and energy components, headline inflation increased 0.6% and 5.4% respectively.
Markets fell following the report, with futures tied...
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