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Fed's preferred inflation gauge climbs 4.8% in June, holding near 40-year high
Inflation accelerated more than expected in June with headline prices hitting new record
By Megan Henney FOXBusiness
The Federal Reserve's preferred inflation gauge accelerated more than expected in June, according to new data released on Friday, a worrisome sign as central bankers try to combat higher prices with the steepest interest rate hikes in decades.
The personal consumption expenditures index showed that core prices, which strips out the more volatile measurements of food and energy, climbed 0.6% from the previous month and rose 4.8% on an annual basis, according to the Commerce Department. Those figures are both higher than the 0.5% monthly increase and 4.7% annual increase forecast by Refinitiv economists.
The more encompassing headline figure rose 6.8% on an annual basis, hitting a fresh 40-year high as gas prices surged, while inflation jumped 1% from May to June, tying its biggest monthly gain since 1981.
While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chairman Jerome Powell told reporters this week that core data is actually a better indicator of inflation.
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