U.S. Bureau of Economic Analysis (BEA) reports on Core PCE inflation rate

U.S. PCE Inflation Falls to 2.1%, Lowest Since 2021; Core Rate Steady at 2.7% for Six Months

Oct 31, 2024, 12:36 PM

The U.S. Personal Consumption Expenditures (PCE) Price Index for September rose 0.2% month-over-month, aligning with market expectations, and bringing the year-over-year increase to 2.1%, down from 2.2% in August. This marks the lowest annual PCE inflation rate since early 2021, nearing the Federal Reserve's 2% target. The Core PCE Price Index, which excludes food and energy costs and is closely watched by the Federal Reserve as a key measure of inflation, increased by an unrounded 0.254% month-over-month, slightly higher than the expected 0.2%. On a year-over-year basis, Core PCE remained at 2.7%, unchanged from the prior month but marginally above the anticipated 2.6%. Importantly, the core PCE inflation rate has not declined over the past six months. The three-month and six-month annualized rates of core PCE inflation were both 2.3%, indicating a moderate inflation trend. Personal income grew by 0.3% in September, matching economists’ forecasts, while personal spending increased by 0.5%, exceeding expectations of a 0.4% rise. Real personal spending, adjusted for inflation, rose by 0.4%. The savings rate declined to 4.6%, the lowest level since December 2022.