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 2.0% in July, the annual rate then slipped a little and then hovered in a range between 1.8% and 2.0% through the end of 2018 and into early 2019.
January’s expenditure figures have now been published by the Bureau of Economic Analysis as part of the February personal income and expenditures report (some results have been delayed by the US federal shutdown in late-December and early-January). At +0.1% for the month, core PCE inflation was lower than December’s +0.2% and lower than the expected +0.2% increase. On a 12-month basis, the core PCE inflation rate fell from December’s figure of 2.0% to 1.8%.
