The latest Personal Consumption Expenditures (PCE) Price Index data reveals that January 2024 saw a 2.5% increase in consumer prices compared to the same period last year. The core PCE Price Index, which excludes volatile food and energy prices, rose by 2.6%, indicating persistent inflationary pressures in the US economy.
While these figures show a slight easing from the previous month's grim numbers, both the overall and core PCE indices remain above the Federal Reserve's target of 2%. This suggests that the US economy is still grappling with significant inflationary challenges.
Adding to consumer concerns, a recent survey conducted by the University of Michigan in February found that Americans expect a 3.5% inflation rate over the next 5 to 10 years. This marks the largest month-on-month increase since May 2021 and the highest expectation since 1995, highlighting growing anxiety about the long-term economic outlook.
As inflation remains above target, both policymakers and consumers are closely watching economic indicators to gauge the trajectory of the economy. The sustained inflationary pressure underscores the delicate balance the Federal Reserve must maintain in its efforts to stabilize prices without hindering economic growth.
Reference(s):
cgtn.com
