Core PCE Inflation Slows in August

The BEA's Personal Income and Outlays report revealed inflation slowed in August. Core PCE, the Fed's favored measure of inflation, was up 0.1% from July and slowed to 3.9% year-over-year, the lowest reading in over two years but still above the Fed's 2% target rate. The latest headline PCE price index was up 0.4% month-over-month (MoM) and rose to 3.5% year-over-year (YoY).

PCE Price Index

Personal consumption expenditures (PCE) measures and tracks changes for all domestic personal consumption. Core PCE measures the changes in personal consumption less food and energy, making it less volatile than the headline PCE. The PCE Price Index is calculated using PCE data and is a key way to measure changes in purchasing trends and inflation.