A key measure of inflation surged to a new 30-year high

The price index tracking consumer spending -- the PCE price index -- was up 4.3% over the 12 months ending in August. That was a faster pace than July's 4.2% and the fastest increase since January 1991.

Stripping out food and energy prices, which tend to be volatile, the inflation measure stood at 3.6%, where it has been since June. It remains the fastest rate of so-called core inflation since March 1991 and well above the Federal Reserve's target of 2%.

While prices rose sharply, American incomes increased at only a modest pace, up 0.2% or $35.5 billion. Disposable income was up by even less -- just 0.1% or $18.8 billion.

And yet Americans kept going out to spend their cash. Consumer spending rose 0.8% or $130.5 billion in August.