U.S. core personal consumption expenditures inflation increased 0.2% month on month in August, coming in below economists’ expectations for a 0.3% rise.
Data from the Bureau of Economic Analysis showed the core PCE price index, which excludes food and energy, accelerated from a 0.1% monthly increase in July.
The latest reading provides another measure of underlying U.S. inflation as investors assess the outlook for monetary policy.
Annual Core PCE Inflation Holds at 3.0%
On a year-on-year basis, the core PCE price index increased 3.0% in August.
The annual rate was unchanged from the 3.0% recorded in July and was also below economists’ projections.
The figures showed underlying inflation remained stable on an annual basis while monthly price growth increased from July but came in below expectations.
Headline PCE Increases 0.3%
Including food and energy prices, the headline PCE price index increased 0.3% month on month in August.
On an annual basis, headline PCE inflation stood at 3.4%.
The core and headline PCE indices provide separate measures of changes in consumer prices, with the core measure excluding the more volatile food and energy components.
Federal Reserve Monitors PCE Inflation
Federal Reserve policymakers closely monitor PCE inflation when assessing price pressures and setting interest rates.
The August figures showed core PCE inflation below expectations on a monthly basis, while its annual rate remained unchanged at 3.0%.
Headline PCE inflation, meanwhile, stood at 0.3% month on month and 3.4% year on year.