Another key measure of inflation hit a 39-year high in November as prices continue to rise

• PCE inflation notched a monthly gain of 0.6% and a 5.7% jump year-over-year in November.
• The data shows prices continued to rise at the fastest pace in decades as Americans entered the holiday season.

Personal consumption expenditure data for November shows prices for everyday goods continued to rise at a brisk pace, with the key measure of inflation ticking up 0.6% in the month and 5.7% compared to the same period in 2020.

That annual gain is the biggest jump in the PCE index since 1982. Another key inflation metric previously released by the Commerce Department, the Consumer Price Index, was also the highest since 1982 in November. That means today's PCE jump was somewhat expected, but it confirms just how dramatically inflation went up in November, pretty much across the board.

The Biden administration and the Federal Reserve had argued for much of 2021 that inflation would be "transitory," although that term was undefined for much of the year and retired this fall by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen. The Fed's projections have undershot inflation consistently this year, after decades in which the Fed overshot inflation that stayed around 2%.

Still, to consider the implicit argument of so-called Team Transitory, the 5.7% annual figure is skewed relative to a pre-vaccine deflationary era in November 2020, and on a two-year basis, the inflation figure is closer to 4%.

Data from the Commerce Department released Thursday shows core PCE — which excludes the more volatile price of food and energy — increased 0.5% during November. Food and energy prices gained 0.7% and 3.6%, respectively, in the month. Core PCE was up 4.7% compared to November 2020.

"While month-to-month data can be volatile, overall, this report is consistent with a strengthening labor market supporting consumer spending as the post-pandemic expansion continues apace," the Council of Economic Advisors wrote on Twitter.

The CEA also cautioned that the November data data from before the rise of the Omicron variant, and it is unclear how that variant will impact consumption of goods and services in December and afterward. In other words, high inflation could take a lot longer to transit out of the economy.