by Wolf Richter
Wolf Street
In a broader sense, there has been no progress at all on inflation in eight months.
The sharply falling prices since mid-2022 of energy such as gasoline, and durable goods, such as motor vehicles, had contributed a lot to the cooling of inflation measures. But prices cannot fall forever – they can rise forever, but they cannot fall forever, and they stopped falling. And on top of it, services inflation has gotten stuck in mid-2024 at too high levels.
As a result, overall inflation indices, including the PCE price index released by the Bureau of Economic Analysis today, have started accelerating again on a year-over-year basis. The driver of inflation has been and still is in “core” services, which, at 3.8% year-over-year for the core services PCE price index, remains substantially higher than before the pandemic (yellow in the chart below).