A key inflation measure showed that prices rose at their fastest level in nearly 39 years, the Commerce Department reported Friday.
The core personal consumption expenditures price index, the Federal Reserve’s primary inflation gauge, rose 5.2% from a year ago, slightly more than the 5.1% Dow Jones estimate. It was the highest level since April 1983.
Including food and energy prices, headline PCE was up 6.1%, the strongest gain since February 1982.
On a monthly basis, core PCE rose 0.5%, in line with estimates, while the headline gain was up 0.6%.
The same report showed that consumer spending accelerated faster than expected, rising 2.1% on the month against the 1.6% estimate. The spending increase reversed a 0.8% decline in December. Personal income was flat for the month, which was better than the expectation for a drop of 0.3%.
A separate report also brought more better than expected news: Orders for long-lasting goods jumped 1.6% in January, compared to the outlook for a 0.8% gain.