Inflation continues to soar as a key metric watched by the Federal Reserve hit a 40-year high. According to the latest data from the Bureau of Economic Analysis, the personal consumption expenditures price index rose by 6.8% in June, marking the largest 12-month increase since 1982.
The personal consumption expenditures price index, which excludes the more volatile food and energy prices, increased by 4.8% over the past year.
The personal consumption expenditures rose by 1.1% from May to June, but it was tempered by inflation. The report noted that real spending, when adjusted for inflation, rose by just 0.1%.
While personal income rose by 0.6%, disposable income, when adjusted for inflation, fell by 0.3%.
“The rest of the economy might be slowing down, but wages are speeding up,” said Nick Bunker, economic research director at job placement site Indeed, according to CNBC. “Competition for workers remains fierce as employers have to keep bidding up wages for new hires. These red-hot wage growth statistics may fade in the near term, but there’s a long way for them to drop.”
The Federal Reserve has been trying to clamp down on inflation by raising interest rates and working to wind down its balance sheet. Earlier in the week, the Fed announced a second consecutive interest rate of 0.75%, bringing the interest rates to a range of 2.25%-2.5%.