A key measure of U.S. inflation kept up its pace in September, government data showed Friday, boosted by rising costs in services such as transportation, along with an uptick in food.
The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index, rose 6.2% from a year ago in September, the same rate as the month before, Commerce Department data showed.
Compared with August, the index rose 0.3%, in line with analyst expectations and failing to provide reprieve to President Joe Biden or the Fed with price pressures still elevated ahead of midterm elections.
Food prices were 11.9% higher than a year ago in September, while energy prices have spiked 20.3%, the data showed.
Policymakers have been battling to cool decades-high inflation, worsened by supply chain snarls and the fallout from Russia's invasion of Ukraine, which sent food and energy prices surging globally.
The Fed focuses on the PCE price index as it reflects consumers' actual spending, including shifts to lower cost items, unlike the more well-known consumer price index (CPI).
Although the CPI has come down from June's decades-high rate of 9.1%, down to 8.2% in September, higher prices remain top-of-mind for voters with just days to go before elections.
The Fed has raised interest rates aggressively this year to try to cool demand and lower inflation pressures, and officials are widely expected to press on with rate hikes at an upcoming policy meeting next month.
Excluding the volatile food and energy components, the PCE price index rose 5.1% from a year ago, pointing to broader increases in the costs of goods and services.
Compared with the prior month, the index rose 0.5%, excluding food and energy.
Friday's data also shows that household spending rose 0.6% in September, with housing and utilities, along with transportation services, becoming more pricey.
High inflation is "forcing the Fed to hike rates further," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics, adding that this means there remain risks to consumption and growth moving forward.
Copyright 2022, Agence France-Presse
