From CNBC:
The Federal Reserve’s favorite inflation measure showed intensifying price pressures in February, rising to its highest annual level since 1983, the Commerce Department reported Thursday.
Excluding food and energy prices, the personal consumption expenditures price index increased 5.4% from the same period in 2021, the biggest jump going back to April 1983.
Including gas and groceries, the headline PCE measure jumped 6.4%, the fastest pace since January 1982.
The core PCE increase actually was a touch lower than the 5.5% Dow Jones estimate. On a monthly basis, the gauge was up 0.4%, in line with estimates.
Surging prices dented consumer spending, which rose just 0.2% for the month, below the 0.5% estimate. Disposable income increased 0.4%, a touch below the 0.5% expectation, while real disposable income fell 0.2%. Savings nudged higher to $1.15 trillion, or a rate of 6.3%.....
....MORE
And more to come.
For our purposes the greatest practical difference is the weighting of shelter. As we saw last week the CPI weights rent and Owner Equivalent Rent at 32%+ while in the PCE Index it is about half as much.
The Fed switched from monitoring the CPI to using the PCE in the year 2000, here's Greenspan's rationale.
The difference in weightings is a result of differences in methodology, which ends up with PCE showing lower inflation than the CPI, something the U.S. government likes as it lowers annual Cost of Living Adjustments across a huge range of programs from Social Security to government employee salaries and pensions to food stamps to disability payments.....
