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Inflation, measured by the Federal Reserve’s preferred Personal Consumption Expenditures index climbed 6.8% in the twelve months that ended in June. That’s the fastest rate of growth since 1982. Core PCE inflation (that is after removing food and energy costs) rose 4.8%. The core rate was slightly above the 4.7% expected by economists surveyed by Bloomberg.

In other data today wages climbed at a robust clip, although not a high enough gain to keep up with inflation. The Employment Cost Index climbed by 5.1 percent in the second quarter compared to the same period last year. Wages and salaries increased 5.7% for the 12-month period ending in June 2022, the Bureau of Labor Statistics reported. That was well above the 3.5% annual rate in June 2021.

There’s nothing here to argue against another big interest rate increase at the Federal Reserve’s September 21 meeting. Either 50 basis points or 75 depending on the inflation and job market numbers for July and August. Those number are likely to be tough to interpret since it’s likely that we’ll see a drop in headline inflation in July because of a retreat in gasoline prices, but it won’t be certain how durable that drop in gas prices will be.

So far, though, it looks like the Fed, and its two 75 basis point interest rate increases at the last two meetings, are working to slow the economy but have yet to bite deeply into the inflation rate.