The Federal Reserve’s preferred inflation metric moved farther from its target in September, as consumers continue to contend with heightened price pressures.
The Commerce Department released data on Thursday showing that the personal consumption expenditures (PCE) index increased by 0.5% month‑over‑month in September and rose 3.6% year‑over‑year, figures that matched economists’ forecasts compiled by LSEG.
Core PCE, which excludes volatile food and energy components, rose 0.3% month‑over‑month and 3.1% year‑over‑year, aligning with economists’ expectations.
Fed policymakers are concentrating on the headline PCE figure as they aim to bring inflation back to their long‑run 2% target, while regarding core data as a more reliable gauge of underlying inflation.
Despite inflation moving further from the Fed’s 2% target, the Commerce Department also issued an advance estimate showing that third‑quarter GDP expanded more than anticipated.
The Bureau of Economic Analysis estimated that third‑quarter GDP was 3.4%, surpassing the 3.2% forecast from LSEG economists. The BEA will issue two further revisions of the Q3 GDP figures.
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