Inflation & Prices
Fed’s Favored Inflation Gauge Picks Up, Backs Cautious Approach
- Core PCE price index increased 2.8% in October from a year ago
- Robust disposable income gain points to resilient spending
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The Federal Reserve’s preferred measure of underlying inflation accelerated in October from a year ago, helping explain policymakers’ more cautious approach to lowering interest rates.
The so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 2.8% from October last year and 0.3% from a month earlier, according to Bureau of Economic Analysis data out Wednesday. A good part of that acceleration was due to the impact of higher stock prices on the calculation.