The PCE report, the Fed’s preferred inflation measure, is out. Here’s what it says.
Personal consumption expenditure (PCE) price index, the Federal Reserve’s preferred inflation measure, Rose January was 2.5%, matching economists’ expectations and provides some guarantees in the hotter inflation data at the inflation data earlier this month.
PCE index and other inflation standards, such as the Consumer Price Index, measure price changes in typical goods and services hours.
By number
According to economists at financial data firm Factset, January’s figures forecasts PCE will grow by 2.5% annually.
Although inflation began with its recent peak of 9% in June 2022, it was still above the Fed’s target of pushing it toward an annual rate of 2%. Today’s PCE data follows a close follow-up to the recent CPI report, which indicates inflation Accelerate in January to 3% per year.
What does an economist say
The PCE report shows that inflation “has risen in average in January, which provides some relief after a series of economic reports suggesting inflation is heating up again,” Rajeev Sharma, director of fixed income investment, said in an email.
Recent sticky CPI reports reinforce Fed’s decision in January pause With the additional drop, today’s data suggest that central banks can still lower more this year. That said, “Based on today’s data, the idea of multi-tax in 2025 may be too optimistic.”
Many consumers have also expressed their concerns about stubborn inflation, with most Americans telling CBS News Polls Income doesn’t keep pace inflation. Polls found that some people expressed concern about their ability to save or purchase additional abilities.
Under some recent measures, consumer sentiment is deteriorating amidst stubborn inflation and other headwinds. “The University of Michigan’s consumer sentiment index for Democratic consumers fell to its lowest level since the economic collapse in February,” Bill Adams, chief economist at Comerica Bank, noted in an email.
“Consumers who are worried about tariffs, layoffs and fear of deportation appear to be retreating,” he added.
