Americans are Getting Poorer While Prices Keep Going Up

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Americans’ real weekly earnings dropped sharply in April and still remain well below their level when President Joe Biden first took office, according to data from the Bureau of Labor Statistics (BLS).

Real average weekly earnings fell to $1,191.93 in April, declining by 0.4% in the month and 4.8% compared to the start of Biden’s term in January 2021, according to data calculated by the Daily Caller News Foundation from the BLS. Prices have risen over 19% since Biden first took office and 3.4% in the last year, degrading the value of Americans’ wages.

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Inflation Stays High as Rising Prices Continue to Squeeze Americans

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Inflation ticked down slightly year-over-year in April but still remained high as rising prices continue to take a toll on average Americans’ finances, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.

The consumer price index (CPI), a broad measure of the prices of everyday goods, increased 3.4% on an annual basis in April and 0.3% month-over-month, compared to 3.5% in March, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained higher, rising 3.6% year-over-year in April, compared to 3.8% in February.

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Producer Inflation Makes Biggest Jump in a Year in Potential Warning Sign for Future Economy

Factory worker

A measure of wholesale inflation that tracks prices before they reach consumers surged to its fastest annual rate since April 2023, according to new data released Tuesday by the Bureau of Labor Statistics (BLS).

The producer price index (PPI) rose 0.5 percent in April, totaling a 2.2 percent annual rate, far higher than estimates that the index would rise 0.3 percent in the month, according to the BLS. The report adds to fears that inflation is once again surging following the consumer price index jumping to 3.5 percent in March, up from 3.2 percent in February and far from the Federal Reserve’s 2 percent target.

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Companies are Slashing Away at Debt as Surging Inflation Casts Shadow over Interest Rate Cuts

Business meeting

Many companies are looking to cut down on their debts as recent high inflation reports have made borrowing more expensive as the prospect of interest rate cuts by central banks diminishes, The Wall Street Journal reported Wednesday.

Even companies with already high credit outlooks are deleveraging to boost their rating with top agencies and reduce debt costs that have increased along with interest rates, while firms with lower ratings are needing to cut debt to maintain profitable operations, according to the WSJ. Investors have had to adjust their view about when interest rates might decline in recent weeks as persistently high levels of inflation have made it less likely that central banks around the world, including in the U.S., will cut interest rates, reducing the cost of holding debt.

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Commentary: Inflation Will Stick Around as Long as The Big Spenders Do

President Joe Biden signing a bill

August came early to the nation’s capital with last week’s round of March inflation data. The late summer weather in Washington, D.C., is notoriously hot and sticky, two accurate descriptors of the latest price increases facing families and businesses alike. Inflation is stubbornly high, and the Biden administration’s spendthrift public policies are to blame.

In the past 12 months, consumer prices rose 3.5 percent, the second month of accelerating annual inflation. In March alone, prices rose 0.4 percent. That may not sound like much, but it’s actually terrible. If that monthly inflation rate holds steady, prices will double in less than 16 years.

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Investors Scramble to Adjust Their Portfolios After Inflation Surge

New York Stock Exchange trading floor

Many investors are diversifying their portfolios from standard stocks and bonds as March’s inflation surge casts doubt on economy-boosting rate cuts from the Federal Reserve happening this year, according to Reuters.

The consumer price index increased to 3.5 percent year-over-year in March, up from 3.2 percent in February and far from the Fed’s 2 percent target. Markets prior to March’s inflation report anticipated a few rate cuts this year, leading investors to buy up stock in anticipation that markets would rise when cuts materialize, but the increasing possibility that the Fed will not cut rates this year has led investors to switch up their market strategy, according to Reuters.

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Retailer Joann Fabrics Files for Bankruptcy as Americans Cut Back on Creature Comforts

Joann Fabrics store

Major fabric and craft retailer Joann announced Monday that it was filing for bankruptcy as consumers pull back on spending due to harsh economic conditions.

The retailer recently reached an agreement with a majority of its financial stakeholders as well as other financing parties, giving the company around $132 million in new financing while also reducing the debt on the company’s balance sheet by around $505 million, according to an announcement from Joann. Retail sales across the U.S. economy have continued to slump in recent months, growing just 0.6 percent month-to-month in February, not including inflation, and declining 1.1 percent in January as consumers pull back on non-essentials as prices rise.

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Corporate Media in Crisis as Outlets Grapple with Biden’s Economy

Joe Biden

Numerous legacy media outlets are struggling with challenges posed by President Joe Biden’s economy and resorting to drastic measures, Axios reported on Friday.

Close to a dozen of these outlets are firing workers, dealing with employee strikes or looking to sell, according to Axios. The Federal Reserve’s imposition of high interest rates to bring down inflation is hindering their ability to accumulate more debt, complicating their efforts to extend the timeline for resolving their financial difficulties.

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Majority of Small Businesses Not Seeing Holiday Bump as Consumers Run Out of Cash: POLL

In a poll of small business owners, 76 percent said that they had not seen an increase in sales during the holiday season as inflation and other economic conditions constrict consumers’ cash, according to Goldman Sachs.

Of small business owners surveyed, 55 percent said that their profit margins decreased this year, and a further 70 percent said that their own personal spending plans for their families were negatively impacted following their own assessment of the state of the economy, according to a poll by Goldman Sachs conducted from Dec. 1 to Dec. 8 of 337 small retail business owners. Consumer spending previously slowed in October as the Americans’ savings declined to $768.6 billion in the month, down from the over $1 trillion held in May and even further from the all-time high of almost $6 trillion held in April 2020.

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Commentary: As Inflation Cools, Fed Keeps Rates Steady, Slowdown Expected in 2024

The Federal Reserve on Dec. 13 held the Federal Funds Rate—the rate at which banks lend to each other—steady at 5.25 percent to 5.5 percent, as the consumer inflation once again cooled to 12-month average level of 3.1 percent, according to the latest data compiled by the Bureau of Labor Statistics.

Leading the cooldown were drops in energy prices as gasoline dropped 6 percent in November, following a 5 percent drop in October.

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Inflation Refuses to Go Away as Prices Stay Elevated

Inflation ticked slightly down year-over-year in November but continued to remain well above the Federal Reserve’s target, according to the latest Bureau of Labor Statistics (BLS) release on Tuesday.

The consumer price index (CPI), a broad measure of the prices of everyday goods, increased 3.1% on an annual basis in November, compared to 3.2% in October, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 4.0% year-over-year in October, compared to 4.0% in October.

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Commentary: Republicans in Congress Need to Do More to Defund ESG

“Anti-woke economic terrorists have now wiped out $5 trillion in stock value.”

That was a headline from Afru.com bemoaning the sideways performance of Environmental, Social and Governance (ESG) funds the past year or so, accusing anyone opposed to ESG with inflicting “economic terrorism” and “erod[ing] financial portfolios of color” as “global investments in ethical companies have nosedived by nearly $5 trillion over the past two years.”

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Consumer Spending Slows Down as Americans’ Savings Dry Up

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Growth in consumer spending fell to the lowest point since March as Americans’ savings fall from the all-time highs seen during the COVID-19 pandemic, according to the Bureau of Economic Analysis (BEA).

Consumer spending, measured by the personal consumption expenditure (PCE), increased by $41.2 billion in the month of October, an increase of 0.2%, less than the 0.7% increase that was seen in September as Americans cut back, accordingto the BEA. The cooling in spending follows a huge decline in the amount of savings Americans collectively hold, falling from over $1 trillion in May to $768.6 billion in October, far from the all-time high of almost $6 trillion in April 2020, according to the Federal Reserve Bank of St. Louis.

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October Inflation Rate 3.2 Percent, Unchanged from Previous Month and Above Target Rate: Feds

The seasonally adjusted inflation rate for October 2023 remained unchanged from the previous month and sits at 3.2%, according to the Labor Department’s Consumer Price Index Report released Tuesday. 

The rate increased by 3.2%, compared to October 2022. In September, inflation was at 3.7% compared to the same time the previous year.

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Economy Shows Huge Growth in Third Quarter as Fed Struggles to Rein in Inflation

The U.S. economy grew at a rate of 4.9% in the third quarter of 2023, according to Gross Domestic Product (GDP) statistics released by the Bureau of Economic Analysis (BEA) on Thursday morning.

In the second quarter of 2023, real GDP rose 2.1% after being revised down from an initial estimate of 2.4%. Economists expected that GDP would be around 4.7% for the third quarter of 2023, far higher than the 2% to 3% that is common for the U.S.

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Soaring Interest Rates Are Squeezing Out Small Businesses

Small businesses are feeling the effects of the Federal Reserve’s interest rate hikes as tightening credit puts more businesses and workers in dangerous positions, according to The New York Times.

Interest payments for small businesses will rise to about 7 percent of revenues next year on average, as opposed to being just 5.8 percent of revenues in 2021, according to the NYT. The Fed has raised its federal funds rate to a range of 5.25 percent and 5.50 percent following a series of 11 hikes that started in March 2022, bringing the rate to its highest point in 22 years.

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Fed: American Households Increased Net Worth During Pandemic

A new report from the Federal Reserve claims that the average American household actually saw an increase in its net worth during the Chinese Coronavirus pandemic.

As reported by Axios, the Fed’s Survey of Consumer Finances, which is released every three years, came out on Wednesday. It was lasted conducted in 2019, thus meaning the next iteration would be held after the pandemic, covering the three-year time period from start to finish.

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Under Biden, Bankruptcies Are Rising for the First Time in over 13 Years

Bankruptcies are rising for the first time in years as more Americans feel the pressure of declining economic conditions without the reprieve of President Joe Biden’s COVID-19 pandemic-era aid programs.

Americans filed more than 39,000 personal bankruptcy cases in August 2023, up 18% year-over-year, with bankruptcies beginning to spike after reaching record lows in 2021 and 2022, with the number of filings rising for all chapters for the first time year-over-year since 2010, according to data from the U.S. Courts. The number of bankruptcies is rising as Americans are increasingly burdened by high interest rates and falling real wages, while the COVID-19 pandemic stimulus and programs that were buoying Americans with debt begin to lose effect, according to experts who spoke to the Daily Caller News Foundation.

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Inflation Surges Above Expectations Despite Fed’s Rate Hikes

Inflation rose significantly in August, marking the second month in a row that inflation has ticked up, according to the latest Bureau of Labor Statistics (BLS) release on Wednesday.

The Consumer Price Index (CPI), a broad measure of the prices of everyday goods, increased 3.7% on an annual basis in August, compared to 3.2% in July, according to the BLS. Core CPI, which excludes the volatile categories of energy and food, remained high, rising 4.3% year-over-year in August, compared to 4.7% in July.

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The Fed’s Favorite Inflation Measure Just Ticked Back Up

The Federal Reserve’s preferred method of tracking inflation went up in July, following a similar move by the Consumer Price Index (CPI), according to the Bureau of Economic Analysis (BEA).

The Personal Consumption Expenditures (PCE) price index rose 0.2% for the month of July, culminating in a 3.3% rise for the year in the Fed’s preferred measure of inflation, up from 3.0% year-over-year in June, according to BEA data. The CPI, which is another measure of inflation, rose 3.2% in July, up from 3.0% in June year-over-year.

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Economy Grew Less than Previously Thought in Second Quarter

Economic growth was revised downward for the second quarter of 2022, coming more in line with economists’ original expectations, according to the Bureau of Economic Analysis (BEA).

Yearly real Gross Domestic Product (GDP) was revised down from 2.4% to 2.1% growth in the second estimate for the second quarter of 2023, according to the BEA. The revision is more in line with original expectations from economists of around 2% growth for the second quarter, showing signs of a cooling economy.

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Average American Workers Now Demand $80K Salary to Start New Jobs

On Monday, the Federal Reserve published research suggesting that the preferred starting wage for the average American worker is at an all-time high.

According to Fox Business, the Federal Reserve Bank of New York determined that the average “reservation wage” – that is, the lowest salary at which a prospective employee will accept a job – reached $78,645 in the second quarter of 2023. This is an 8% increase from the second quarter of 2022, when the average reservation wage was approximately $72,873.

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Powell Signals More Rate Hikes Could Be On The Horizon

Federal Reserve Chair Jerome Powell raised the possibility of more interest rate hikes in prepared remarks Friday as inflation remains above the Fed’s target rate.

Powell hinted that the Fed will raise interest rates in the future if factors like high inflation, a hot labor market and sustained economic growth persist, according to a speech given by Powell at the Jackson Hole Economic Symposium. Interest rates have been raised 11 times since March 2022 in an effort to fight inflation, bringing the federal funds rate within a range of 5.25% and 5.50%, the highest rate since January 2001.

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Biden Sets Leftist Tone for 2024 Re-Election Effort at Philadelphia Event

President Joe Biden held his first presidential re-election campaign event on Saturday at the Philadelphia Convention Center, making strong appeals to his left-wing base. 

Biden appeared alongside organized-labor activists and mentioned in the first few seconds of his oration that when he thinks of working Americans, he especially values the ones who associate with causes he finds politically congenial.

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Commentary: Another California Bank Fails After $100 Billion Run on Deposits and Rising Interest Rates Forces First Republic into FDIC Receivership

The Federal Deposit Insurance Corporation (FDIC) and the California Department of Financial Protection and Innovation put the $229.1 billion California-based First Republic Bank into receivership today on May 1, while the FDIC also entered into a “purchase and assumption agreement” with JP Morgan-Chase Bank for the nation’s largest bank to assume First Republic’s assets as well as its $103.9 billion of deposits.

Another one bites the dust.

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Federal Reserve Predicts ‘Mild Recession’ This Year

Federal Reserve

Federal Reserve economists project that the recent bank collapses will create a “mild recession” later this year, posing potential problems for President Joe Biden and the Democratic Party ahead of the 2024 presidential election.

The Fed’s projection “included a mild recession starting later this year, with a recovery over the subsequent two years,” according to minutes released Wednesday from the central bank’s March 21-22 meeting.

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Pennsylvania Democrats Base Their Pay Equity Bill on Dubious Data

With Equal Pay Day occurring this Tuesday, Pennsylvania Democrats renewed a push to strengthen state and federal pay equity laws, citing workplace discrimination statistics that scholars often find questionable. 

State Senators Maria Collett (D-North Wales) and Steve Santarsiero (D-Doylestown) proposed a bill that would apply the commonwealth’s Equal Pay Law to a broader universe of workers and a greater scope of fringe benefits. The measure introduced unsuccessfully last session, would also bolster employees’ rights to inquire about the wages a company pays and permit workers to collect back wages from employers who courts find in breach of the law. The senators said these changes are necessary because women in Pennsylvania earn 79 cents for every dollar men receive, a disparity of over $10,000 per year.

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Supreme Court to Decide Fate of Controversial Consumer Financial Protection Bureau

The Supreme Court announced Monday it would take up a case challenging the Consumer Financial Protection Bureau’s (CFPB) funding mechanism on constitutional grounds.

On Oct. 19, 2022, the U.S. Court of Appeals for the 5th Circuit ruled that funding the CFPB through the Federal Reserve violates the Constitution’s Appropriations Clause, which gives Congress the “power of the purse” in appropriating government funds. The CFPB filed a petition for a writ of certiorari on Nov. 14, 2022, which the Supreme Court granted Monday morning.

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Fed’s Favorite Inflation Index Blew Past Expectations in January

The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, surged past economists’ expectations in January, breaking a recent downward trend, according to the Bureau of Economic Analysis (BEA) Friday.

The PCE price index jumped by 0.6% on a monthly basis, and climbed to 5.4% on a year-over-year basis, up from 5.3% in December, the BEA reported. Economists had predicted the year-over-year number would continue to fall to 5% in January, but prices instead shot up at the highest levels since June, The New York Times reported.

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U.S. Notches Record Trade Deficit in 2022

The U.S. trade deficit increased to its highest recorded level in 2022, thanks in part to a surging trade deficit with China.

The U.S. registered a roughly $948.1 billion goods and services deficit for the year, including a $382.9 billion goods deficit to China, the U.S. Bureau of Economic Analysis (BEA) revealed Tuesday. This 12.2% surge over 2021 marks an all-time U.S. trade deficit record, The Wall Street Journal reported.

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Commentary: The Unknown Impact of Inflation on Rural Americans

When the Federal Reserve convenes at the end of January 2023 to set interest rates, it will be guided by one key bit of data: the U.S. inflation rate. The problem is, that stat ignores a sizable chunk of the country – rural America. Currently sitting at 6.5%, the rate of inflation is still high, even though it has fallen back slightly from the end of 2022.

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Consumers Are Paying Record Credit Card Rates Due to Inflation

Average interest rates for bank-issued credit cards this past November surpassed a record set in 1985, Axios reported Wednesday, citing data from the Federal Reserve.

The previous record rate was 18.9%, set in the first quarter of 1985, with November’s rate of 19.1% comfortably eclipsing it, according to Axios. Credit card interest rates climbed alongside the Federal Reserve’s federal funds rate, which the Fed hiked a historically aggressive pace in 2022 to blunt economic demand and reduce the impact of inflation, NPR reported.

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Federal Reserve Raises Rates by Half Percentage Point, Signaling Slowing of Rate Hikes

The Federal Reserve on Wednesday announced a reduced but still notable hike in U.S. interest rates, with the central bank moving to hike rates by half a percentage point as part of its ongoing efforts to tamp down inflation.

The hike, which comprises 50 basis points, is less than the three-quarter-point hikes the bank has enacted every month for the last several months, though it still represents a significant raise at a time when the economy remains fragile after years of turmoil and unertainty.

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Commentary: Don’t Be Fooled by October’s Decrease in the Rate of Inflation

October’s Consumer Price Index, the measure of the national rate of inflation, was at 7.7 percent in October, compared to a reading of 8.2 percent in September. The report propelled “U.S. stocks forward [at the open] and sent Treasury yields tumbling as Wall Street weighed the implication of softer prints on Federal Reserve policy.”

The decline in the rate of inflation was driven by declining annual prices of “necessities” such as smartphones (-22.9 percent), admission to sporting events (-17.7 percent), televisions (-16.5 percent), and women’s outerwear (-1.4 percent), all items that are discretionary purchases.

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As Inflation Rages On, More Americans Are Living Paycheck to Paycheck

As inflation continues to batter consumers, the number of Americans living paycheck to paycheck climbed to 60% in August, according to a Friday report from financial services company LendingClub.

The increase, up from 57% in September 2021, was driven primarily by a greater portion of six figure earners slipping into a paycheck-to-paycheck lifestyle, according to the LendingClub report. While the proportion of those earning less than $50,000 and those between $50,000 and $100,000 living paycheck to paycheck stayed roughly the same, at 73.6% and 62.4% respectively, earners between $100,000 and $150,000 saw a more than 6.5% increase to 43.8% living paycheck-to-paycheck.

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Goldman Sachs Warns Investors High Rates Are Here to Stay

Even in the best case scenario where the Federal Reserve is able to combat inflation without causing a recession, it is unlikely to cut interest rates, Goldman Sachs analysts warned in a note, according to Business Insider.

The Federal Reserve has raised rates three times in the past four months, with Wednesday’s 0.75% increase bringing primary credit rates to 3.25%, one of the most aggressive increases since the 1980s. However, even in a so-called “soft landing” where a recession and layoffs are avoided, the Fed is unlikely to cut interest rates until “something goes wrong,” according to a Goldman Sachs note reported by Business Insider.

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Commentary: Powell Won’t Admit How America Got into Such Dire Economic Straits in the First Place

The Federal Reserve’s decision to raise target interest rates by 75 basis points for the third time this year following a Wednesday meeting of the Federal Open Market Committee all but ensures American families’ financial pain will continue and our current recession will likely drag on.

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Fed Hikes Interest Rates for Third Time in Four Months

The Federal Reserve has raised target interest rates by 75 basis points for the third time this year following a Wednesday meeting of the Federal Open Market Committee.

The new target range for the federal funds rate is anywhere between 3% to 3.35% up from the current 2.37%, making it the most aggressive hike since the early 1980s. The Federal Reserve is expected to continue this trend into March of 2023 as an attempt to curb ongoing increases in inflation, CNBC reported.

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Commentary: Federal Reserve’s False Assumptions Push the Economy into Recession

Federal Reserve

Based on its assumptions, the Federal Reserve is doing everything right by raising interest rates rapidly after years of easy money. It will certainly succeed in its goal of “cooling down” the economy.

Unfortunately, the Fed’s basic assumptions are wrong, and it has already begun reducing Americans’ standard of living, as indicated by this week’s Commerce Department report showing the nation’s gross domestic product fell for the second quarter in a row, meeting the common definition of a recession.

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The Fed’s Preferred Inflation Metric Just Surged in Another Warning Sign for the Economy

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, continued to surge in June, according to data released Friday by the Bureau of Economic Analysis (BEA).

The PCE index was up 6.8% for the year ending in June, an increase from the 6.3% that it was at in both April and May, the BEA announced. PCE is the Fed’s preferred measure of inflation because it is “just better at capturing the inflation people actually face in their lives,” and the central bank endeavors to keep it at 2%, Federal Reserve chair Jerome Powell said Wednesday.

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Federal Reserve Announces Rate Hike to Combat High Inflation

The U.S. Federal Reserve announced another 0.75% rate hike Wednesday in response to inflation, which has soared to its highest level in more than four decades.

The announcement comes after just last month the Federal Reserve announced a rate hike of the same size, which at the time was the largest rate increase since 1994. 

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Federal Reserve Chair Powell Says During Senate Hearing That a Recession Is Possible

Federal Reserve Chair Jerome Powell said the U.S. could enter into a recession when questioned Wednesday during a Senate Banking Committee hearing.

Confronted about 40-year-high inflation and the Fed raising interest rates in response, Powell said he couldn’t know for sure but said a recession, defined as a significant decline in economic activity over time, is possible.

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