A key inflation measure closely watched by the US Federal Reserve increased at the fastest pace in 39 years in November, raising pressure on the central bank to tighten monetary policy.
The personal consumption expenditure (PCE) price index, the Fed’s preferred inflation measure, jumped 5.7 per cent in November from a year ago, the fastest annual pace since July 1982, Xinhua news agency quoted the Commerce Department as saying on Thursday.
The so-called core PCE price index that strips out volatile food and energy prices, rose 4.7 per cent from a year ago, well above the Fed’s inflation target of 2 per cent.
A separate report from the Labour Department also showed that the consumer price index (CPI) rose 6.8 per cent in November from a year earlier, the fastest annual pace in almost 40 years.
Last week, the Fed had announced that it would accelerate the end of its asset purchase program while projecting three interest rate hikes next year.
“We are phasing out our purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labour market, the economy no longer needs increasing amounts of policy support,” Fed Chairman Jerome Powell had said.
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