The price index for American consumer spending, also known as the PCE index, rose at a rate of 4.2% in the year ended July, the fastest pace since January 1991.
Stripping out food and energy items, the prices of which tend to be more volatile, the inflation index stood at 3.6%, flat from the month before and remaining at its highest level since March 1991.
But Americans’ incomes rose as well in July, climbing more than expected — albeit still not as much as prices. Incomes rose by 1.1% last month, boosted by increased government benefits and higher wages. Benefits from child tax credit payments under the American Rescue Plan offset waning unemployment benefits as various states ended their pandemic jobless claims programs early.
It was the biggest jump in incomes since March, when the latest round of stimulus checks bolstered people’s wallets….