The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier.
The Commerce Department reported Friday that its personal consumption expenditures price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and the most since February.
Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.
Prices rose 0.3% from July, compared to a 0.2% increase the month before. Core prices rose 0.2%, the same as in July.
Separately, the report shows consumer spending rose 0.4% from July, largely on a 0.7% increase in spending for goods; spending on services such as travel and dining out rose just 0.2%.
Incomes rose 0.4%, same as the month before. Income for the self-employed and business owners rose 0.9% for the second straight month. Wages and salaries rose 0.3% from July, dipping from a 0.5% increase the month before.
Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. But annual price gains remain stubbornly above the central bank’s 2% target.
