One of the US Fed’s favoured measures of inflation is core personal consumption expenditure (PCE). The core version of consumer spending strips out energy and food components, which are volatile from month to month, in an attempt to identify the prevailing trend. It’s not the only measure of inflation used; the Fed also tracks the Consumer Price Index (CPI) and Producer Price Index (PPI) from the Department of Labor.
The latest core PCE figures have been published by the Bureau of Economic Analysis as part of August figures for personal income and expenditures. At 0.1% for the month, the numbers were below the market’s expectation of +0.2%. On an annual basis, core PCE increased by 1.3% which was lower than July’s comparable annual figure of 1.4% which in turn was lower than June’s 1.5%.
