The price index tracking consumer spending increased by 6.1% between January 2021 and January 2022, according to new data from the Commerce Department released Friday. That was the biggest annual increase since February 1982.
Stripping out food and energy costs, which tend to be more volatile, prices rose 5.2% over the same period. It was the fastest advance since April 1983.
For the month of January, prices rose 0.6%, or 0.5% excluding energy and food, in line with economists’ predictions but at a faster rate than in the month prior.
The personal consumption expenditure price index, or PCE, is the Federal Reserve’s preferred measure of inflation. Keeping prices stable is one of the Fed’s main tasks. Fed Chairman Jerome Powell hinted in January that it would begin to raise interest rates to combat the high pandemic-era inflation. The first such rate increase is expected at the central bank’s March meeting. Friday’s report likely has not changed that trajectory.