On a monthly basis, core PCE grew 0.1%, its slowest month-on-month increase since a 0.3% decline in April 2020.
It’s the lowest annual increase that index has seen in two years and is a positive step toward the Fed’s target of 2% inflation, according to Commerce Department data released Friday. The core Personal Consumption Expenditures index, a closely watched inflation measure that excludes gas and food prices, rose 3.9% for the 12 months ended in August. Higher gas prices heated up overall inflation last month, but the Federal Reserve got some welcome news: Its preferred inflation gauge cooled to its lowest level in two years.
