WH had no idea about Breyer retiring and now they're scrambling. They asked Kamala and she said no, per WH staffer— Release The Poso (@JackPosobiec) January 28, 2022
Key Fed inflation gauge rises 4.9% from a year ago, fastest gain since 1983
FRI, JAN 28 2022 8:32 AM ESTUPDATED 2 MIN AGO Jeff Cox
FTA
A gauge the Federal Reserve prefers to measure inflation rose 4.9% from a year ago, the biggest gain going back to September 1983, the Commerce Department reported Friday.
The core personal consumption expenditures price index excluding food and energy was slightly more than the 4.8% Dow Jones estimate and ahead of the 4.7% pace in November. The monthly gain of 0.5% was in line with expectations.
Along with the inflation numbers, personal income rose 0.3% for the month, a touch lower than the 0.4% estimate. Consumer spending declined 0.6%, less than the 0.7% estimate.
A separate Labor Department data point that Fed officials also watch closely showed that total compensation costs for civilian workers increased 4% over the past 12 months. That is the fastest pace in history for the employment cost index, a data set that goes back to the beginning of 2002.
However, the seasonally adjusted quarterly increase of 1% was less than the 1.2% forecast, putting some balm on fears of a wage-price inflationary spiral.
The numbers come as rampant inflation is pushing the Fed into an aggressive pace of policy tightening.
Earlier this week, central bank officials indicated they are likely to begin raising interest rates as soon as March. Market pricing is pointing to five quarter-percentage-point increases this year for benchmark short-term borrowing rates, which have been anchored near zero since the beginning of the Covid pandemic in early 2020.
Headline inflation rose at a 5.8% pace as measured by the PCE index, tied for the fastest pace since June 1982.
Markets viewed the data releases as positive, with stock market futures well off their morning lows.
Fed officials are worried about inflation pressures they had characterized through much of last year as “transitory.” While factors tied to the supply chain bottlenecks and powerful demand for goods over services have been a core cause of price increases, inflation has proven stronger and longer-lasting than policymakers had figured.
One area of specific concern is wages and the possibility of a spiral where increases in pay push up prices and in turns drive inflation expectations higher.
“One quarter’s data prove nothing, but with labor participation creeping higher, and measures of excess demand flattening in recent months, it is reasonable to think that wage growth is unlikely to re-accelerate dramatically,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “In the meantime, this report eases the immediate pressure on the [Federal Open Market Committee] to act aggressively; the sighs of relief from Fed Towers should be audible on Wall Street.”
The 4% employment cost index annual increase, though missing estimates and below the 1.3% gain from the previous quarter, still represented a sharp gain from the 2.5% rise from a year ago. Compensation for private industry workers jumped 4.4%, which included a 5% increase in wages and salaries. Benefits costs rose 2.9%.
Despite the gain in wages, consumer spending tailed off, falling 0.6% after gaining 0.4% in November.
The decline in spending came despite a 6.9% increase in gross domestic product in the fourth quarter, which closed out a year in which the economy accelerated at its fastest pace since 1984.
Ha! I didn’t think for one minute the attention needy Kamala would get tucked away working for a living. She’s all in for the cameras, the pampering, the power, the interviews and the travel.
Rep. Jim Clyburn (D-SC) confirmed on Thursday that he hinged his crucial endorsement of Joe Biden during the presidential primary on his choosing a black woman to sit on the Supreme Court.
Thursday, House Majority Whip James Clyburn (D-SC) appeared on FNC’s “Your World” to tout possible Supreme Court pick Michelle Childs, who he is promoting to be appointed by President Joe Biden to fill the vacancy to be left by Supreme Court Associate Justice Stephen Breyer.
Clyburn revealed he had gotten a favorable response from his fellow South Carolina congressional colleagues Sens. Tim Scott (R-SC) and Lindsey Graham (R-SC) when he suggested Childs.