Summary: US Fed’s favoured inflation measure rises 0.2% in September; in line with market expectations; annual rate up for fifth consecutive month; Treasury bond yields higher.
One of the US Fed’s favoured measures of inflation is the change in the core personal consumption expenditures (PCE) price index. After hitting the Fed’s target at the time of 2.0% in mid-2018, the annual rate then hovered in a range between 1.8% and 2.0% before it eased back to a range between 1.5% and 1.8% through 2019. It then plummeted below 1.0% in April 2020 before rising in the June and September quarters.
The latest figures have now been published by the Bureau of Economic Analysis as part of the September personal income and expenditures report. Core PCE prices increased by 0.2% over the month, in line with expectations but lower than August’s 0.3% increase. On a 12-month basis, the core PCE inflation rate accelerated for a fifth consecutive month, from August’s revised rate of 1.4% to 1.5%.
