An inflation gauge closely watched by Federal Reserve policymakers continued to slow in September, as the pace of price growth trended closer to the Fed’s target in September.
The Commerce Department on Thursday reported that the personal consumption expenditures (PCE) index rose 0.2% in September and increased 2.1% year over year. Those figures were in line with estimates by economists polled by LSEG.
Core PCE, which excludes volatile food and energy prices, rose 0.3% for the month and increased 2.7% from a year ago, in line with estimates.
The Federal Reserve is focusing on the PCE headline figure as it tries to bring the pace of price increases back to 2%, although policymakers view the core data as a better indicator of inflation. Headline PCE was down from 2.3% in August to 2.1% in September, suggesting inflation continued to cool, while the core PCE was little changed from a month ago.