The Commerce Department’s inflation measurement, or "Personal Consumption Expenditures Price Index" (PCE), rose 5% in the 12 months through October, the most significant monthly jump since 1990.
The PCE tracks the change in prices of goods and services purchased by consumers throughout the economy. It resembles the Labor Department’s "Consumer Price Index" (CPI) but tracks a broader set of goods and services, adjusting for consumer trends.
The most recent CPI shows prices rose 6.2% year-over-year, also a 31-year high.
Federal Reserve Chairman Jerome Powell and White House officials said for months that a spike in consumer prices would prove "transitory" as the economy shifted away from the repercussions of COVID-19 to normalcy, according to The Associated Press.
However, economists are now voicing a more discouraging message that higher prices will last well into next year, if not beyond.
"It’s a large blow against the transitory narrative," said Jason Furman, the top economic adviser in the Obama administration. "Inflation is not slowing. It’s maintaining a red-hot pace ... They need to stop telling us that inflation is transitory, start becoming more worried about inflation, then act in a manner consistent with being worried."
Inflation will likely endure as companies struggle to keep up with consumers’ demand for goods and services.
"The demand side of the U.S. economy will continue to be something to behold," Rick Rieder, chief investment officer for global fixed income at Blackrock, said. "And companies will continue to have the luxury of passing through prices."
Powell announced that the Federal Reserve would reduce the monthly bond purchases it began last year as an emergency measure to boost the economy, per AP.
© 2021 Newsmax. All rights reserved.