A key statistic the Federal Reserve uses to measure inflation increased by 3.6% in July, its largest increase in 30 years, the Commerce Department said Friday.
The department said the near 4% increase is compared to July 2020 and is the highest level since 1991.
The data comes from the department’s core personal consumption expenditures price index, excluding food and energy prices.
The increase was in line with most analysts’ expectations.
“The increase in personal income in July primarily reflected increases in government social benefits and compensation of employees,” the department’s report said.
“Within government social benefits, an increase in ‘other’ social benefits was partly offset by a decrease in unemployment insurance, reflecting a decrease in payments from the Pandemic Unemployment Compensation program.”
When including food and energy prices, the index was up 4.2% over last year.
According to the report, personal income increased 1.1% to $225.9 billion in July and disposable personal income rose 1.1% to $198 billion. Personal consumption expenditures also increased 0.3% to $42.2 billion.
The report said there were also increases in private wages and salaries.
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