Key inflation figure for the Fed up 4.1% year over year, the highest since January 1991

Inflation rose strongly in October, accelerating at its fastest pace since the early 1990s, according to a Commerce Department gauge that is closely followed by Federal Reserve policymakers.

Prices for personal consumption expenditures excluding food and energy increased 4.1% from a year ago, with the so-called core reading last up that much in January 1991. The Fed prefers that measure as it excludes the volatility that the two categories can show.

The reading matched the Dow Jones estimate.

Including food and energy, the PCE index rose 5%, the fastest gain since November 1990.

Along with the surge in prices came an increase in the amount consumers spent, which rose 1.3% for the month, higher than the 1% estimate. That came with a 0.5% increase in personal income, which was well ahead of the 0.2% estimate.

Inflation continued to be reflected most in surging energy costs, which rose 30.2% from a year ago, while food prices increased 4.8% during the span. Services inflation gained 6.3%, the same as in September, while goods inflation jumped 7.3%, up from the 6.4% pace in the previous month.

Personal savings totaled $1.32 trillion for the month, as the 7.3% rate as a share of disposable personal income declined from 8.2% in September, when savings totaled $1.48 trillion.



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