Inflation in the US is the highest seen since 1991

The US Commerce Department reported on Friday, that the annual inflation rate reached its highest level in more than 30 years during the month of September, despite the decline in personal income.

Core price pressures as measured by the PCE price index, including food and energy, increased 0.3% for the month, pushing the annual rate to 4.4%, the fastest pace since January 1991, according to CNBC”.

After excluding food and energy costs, inflation came in at 0.2% during the month, in line with expectations, and 3.6% for the 12-month period, unchanged from August, but still the highest level since May 1991.

The continued jump in inflation came with personal income declining by 1% in September, more than the expected decline of 0.4%, while consumer spending rose by 0.6%, in line with the market estimate.

The general inflation rate was driven by an increase of 24.9% in energy costs and 4.1% in food prices, while inflation in services prices rose to 6.4% on an annual basis and commodity prices by 5.9%.

The inflation and income data comes as the Federal Reserve grapples with the specter of higher prices and lower growth, with the latest reports revealing that gross domestic product grew at an annualized pace of just 2% in the third quarter, the slowest pace since it began recovering from the recession that ended in April 2020.