The US personal consumer expenditure (PCE) price index is a little known economic statistic that is regularly released but rarely rates a mention. It has come into focus recently because the US Fed sees core PCE as its preferred measure of inflation and thus very relevant in the context of a looming Federal Reserve interest rate increase.
The headline PCE barely increased in August, in line with the median forecast of 0.0% and slightly lower than the July increase of 0.1%. The figures were released by the Bureau of Economic Analysis alongside the August consumer spending figures and they showed the index was 0.3% higher than August a year ago. The core figure, which excludes food and energy, was 1.3% higher and still below the Fed’s target of 2.0%.