The Federal Reserve’s inflation gauge exceeded its expected limit last month, keeping prices at a four-decade high.
QUICK FACTS:
- The Federal Reserve’s expected inflation gauge has once again exceeded its preferred limit for the month of August, keeping prices at a four-decade high.
- According to the Personal Consumption Expenditures (PCE) index, core prices climbed 0.6% last month, rising 4.9% on an annual basis, the Commerce Department reported.
- The figures, both higher than the 0.5% monthly increase in prices and 4.7% annual increase, indicate inflation is making its way through the entire economy.
- “Core inflation accelerated, likely keeping the Fed on track for another aggressive 0.75% increase to the Fed funds rate in November,” chief economist Jeffrey Roach said.
CHIEF ECONOMIST JEFFREY ROACH ON RISING INFLATION:
“The U.S. looks poised to eke out positive GDP [gross domestic product] growth in the third quarter, after two consecutive quarters of negative growth. But growth may not last long. A recession looks more likely in early 2023 as the economy eventually breaks under the pressure of an aggressive Federal Reserve,” Roach said.
BACKGROUND:
- President Joe Biden signed the “Inflation Reduction Act” into law last month, saying the move would allow Congress to pay down federal debt by leading to new federal revenue, but Republicans expressed strong concerns, American Faith reported.
- “The law will increase historic inflation and deepen the ongoing recession,” Alfredo Ortiz, president and CEO of Job Creators Network, said at the time. “Not even the media, which is quick to echo Biden’s claims, thinks the legislation will reduce inflation.”
- “The law significantly raises taxes on job creators, including small businesses, to protect wealthy taxpayers in blue states,” Ortiz continued. “It adds a football stadium worth of new IRS agents to overwhelm small businesses with audits, doubles down on failing Obamacare exchanges, and threatens the innovative prescription drug supply chain.”
