A key inflation indicator increased to its highest level in 38 years while consumer demand remained strong despite soaring prices, the Commerce Department announced Friday.
The Commerce Department’s personal consumption expenditure (PCE) index grew 5.2% in January, exceeding the 5.1% Dow Jones estimate, the Commerce Department reported. The PCE is the Federal Reserve’s preferred measure of inflation, and January’s figure marks monthly the largest year-over-year increase since April 1983.
The PCE increased 0.5% on a monthly basis in January, the same pace as the previous three months, according to the Commerce Department. Including food and energy prices, overall PCE surged 6.1% since January 2021, marking the most annual growth since February 1982.
Black Hills Energy’s base rate for natural gas will increase Jan. 1, the Iowa Utilities Board ruled this week.
Non-gas costs on residential customers’ bills will rise from $0.13625 per Therm to $0.13905 per Therm. The typical monthly increase in base rates for residential customers will be $1.45, the IUB said in a news release Dec. 28.
The Consumer Price Index (CPI) increased 0.9% in November, bringing the key inflation indicator’s year-over-year increase to 6.8%, the highest figure in four decades.
The CPI’s increase is the largest increase in four decades, up from October’s 6.2% according to the U.S. Bureau of Labor Statistics (BLS) report released Friday morning. Experts surveyed by CNBC projected inflation would increase 0.7% in November, translating to a 6.7% gain on a year-over-year basis.
“These are frighteningly high inflation numbers, the likes of which we haven’t seen for decades,” Allen Sinai, chief global economist and strategist at Decision Economics, Inc., told The Wall Street Journal.
Energy prices are spinning out of control and we are facing a crisis of the working people like we haven’t seen since 2009. Energy prices have risen 30 percent on average and the winter has not yet arrived. Families will be faced with the hard decision of choosing between gas to get to work or paying for rent, healthcare, food, or other basic necessities. The economists at Texas A&M University pointed to the tipping point of the “housing recession” of 2010 as being fully caused by gas prices at the pump reaching $3.30 a gallon for a sustained period of 60 days.
The White House downplayed surging energy prices in the U.S. and worldwide on Wednesday, arguing that the climate crisis was more important.
“Certainly, we all want to keep gasoline prices low, but the threat of the crisis — the climate crisis — certainly can’t wait any longer,” White House Press Secretary Jen Psaki told reporters Wednesday.