Article source: ConstructConnect
There are aspects to the current inflation problem that deserve an airing.
First, while the U.S. all-items CPI-U increase, often referred to as the headline rate, is +8.3% y/y and the ‘core’ rate, which leaves out price-volatile food and energy items, is +6.3% y/y, there is another measure that isn’t nearly as extreme.
The Federal Reserve has often indicated that when it comes to assessing inflation, the measure it turns to initially is the Personal Consumption Expenditures index (PCE), less food and energy. This yardstick is currently (July) +4.6% y/y, which is significantly high, but it’s not nearly as runaway as the +8.3% y/y for CPI-U. Also, it’s only a percentage point higher than it was a year ago in July 2021 (+3.6% y/y). (By the way, the U in CPI-U stands for urban consumers.)
