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Core Inflation Rate Falls to 2.8%, Below Expectations

Delayed September PCE data shows headline inflation rising slightly to 2.8%, while core PCE eased, posing challenges for the Fed’s upcoming policy assessment.

Summary

The US Commerce Department’s delayed September data revealed the headline PCE price index rose 0.3% month-over-month, lifting the annual rate to 2.8% from 2.7%. Core PCE inflation declined to 2.8% from 2.9%. The delays mean the Federal Reserve will be assessing next week’s policy decision using outdated indicators, complicating its evaluation of inflation trends.

Terms & Concepts
  • Core PCE Inflation: The Personal Consumption Expenditures price index excluding food and energy, used by the Federal Reserve as a preferred measure of underlying inflation.
  • PCE Price Index: A measure of the average increase in prices for all domestic personal consumption, often used to gauge inflation trends in the US.
  • Federal Reserve: The central banking system of the United States, responsible for monetary policy and regulating financial institutions.