Core inflation rate held at 2.9% in August, as expected, Fed's gauge shows
Source: CNBC
Published Fri, Sep 26 2025 8:31 AM EDT Updated 14 Min Ago
Core inflation was little changed in August, according to the Federal Reserve’s primary forecasting tool, likely keeping the central bank on pace for interest rate reductions ahead. The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.
Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month. The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.
All of the numbers were in line with the Dow Jones consensus forecast. Spending and income numbers were slightly higher than expected. Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Both were 0.1 percentage point above the respective estimates.
Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who last week indicated they see two more quarter percentage point reductions before the end of the year.
Read more: https://www.cnbc.com/2025/09/26/pce-inflation-august-2025.html
Article updated.
Previous article -
Core inflation was little changed in August, according to the Federal Reserve's primary forecasting tool, likely keeping the central bank on pace for interest rate reductions ahead.
The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.
Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month. The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.
All of the numbers were in line with the Dow Jones consensus forecast. Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who last week indicated they see two more quarter percentage point reductions before the end of the year.
Original article -
The personal consumption expenditures price index for August was expected to increase 2.9% from a year ago, according to the Dow Jones consensus estimate.
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= new reply since forum marked as read
Trump nominated him in August, I don't see anything in Googleland about him being confirmed.
and … this is without food and energy … the things ever must have …
So it’s a giant fuck you from the .01%
I'm not a big fan of the PCE, because it is a chained price index. It all boils down to is that it includes the effects of consumers switching to lower grade items, so, for example if in the face of high beef prices, consumers switch to chicken and beans, that lowers the reported meat and food PCE inflation numbers. (The reverse also happens too)
For that reason, I prefer the CPI, which has less of that.
But the PCE, especially the Core PCE, is what the Fed favors, so anyone trying to predict what the Fed might do needs to focus on the Core PCE, and not the CPI measures
I suspect the Fed prefers the PCE with its chained-price shenanigans because it comes in lower than the CPI, thus, it's easier for them to reach their 2% target.
The Fed favors the CORE measures for forecasting FUTURE inflation, as shown by analysis of the data.
I annualize them all to be easy to compare to each other, and to compare to the FED's 2% goal. I use the actual index values rather than the one-digit changes that are commonly reported in the media. Links to the data are with the graphs.
All the numbers were revised beginning January 2021 or maybe even back earlier (my data for producing the graphs, scraped from the FRED sites, goes back to January 2021.
ALL the numbers are the seasonally adjusted ones
In below, "REG" is the regular PCE (all items).
While "CORE" is the Core PCE (all items less food and less energy)
REG CORE
--- ----
3.2% 2.8% July to August change, annualized
2.9% 2.9% 3 month average, annualized
2.7% 2.9% 12 month average, aka year-over-year
Fed target is 2.0%
REGULAR ALL ITEMS PCE
BEA.gov News release: https://www.bea.gov/ and click on "Personal Income and Outlays" or "Personal Income"
https://www.bea.gov/news/2025/personal-income-and-outlays-august-2025
https://fred.stlouisfed.org/series/PCEPI
CORE PCE:
https://fred.stlouisfed.org/series/PCEPILFE
=====================================================
For comparison purposes, here are the CPI graphs
REGULAR ALL ITEMS CPI (released 9/11/25)
https://www.bls.gov/news.release/cpi.nr0.htm
https://data.bls.gov/timeseries/CUSR0000SA0
CORE CPI (released 9/11/25):
http://data.bls.gov/timeseries/CUSR0000SA0L1E
LBN thread on CPI inflation,9/11/25:
https://www.democraticunderground.com/10143528031
