Inflation & Prices
Fed’s Preferred Inflation Metric Increases by Most in a Year
- Core PCE gauge climbed 0.4% in January and 2.8% from year ago
- Spending declined, restrained by weaker outlays for goods
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The Federal Reserve’s preferred gauge of underlying inflation rose in January at the fastest pace in nearly a year, helping explain policymakers’ patient approach to start cutting interest rates.
The so-called core personal consumption expenditures price index, which strips out the volatile food and energy components, increased 0.4% from December, data out Thursday showed. From a year ago, it advanced 2.8%. Economists consider this to be a better gauge of underlying inflation than the overall index.