Core PCE Inflation Rises 2.8% in March, More Than Expected

The BEA's Personal Income and Outlays report revealed inflation rose more than expected in March. Core PCE, the Fed's favored measure of inflation, was up 0.3% from February and was flat at 2.8% year-over-year. Inflation was expected to increase 0.3% month-over-month and cool to 2.6% year-over-year.

The latest headline PCE price index rose 0.3% month-over-month (MoM), as expected. On an annual basis, headline PCE accelerated to 2.7% in March, up from 2.5% in February and higher than the 2.6% forecast.

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.