This Morning’s August PCE Report

This morning, the government released the Personal Consumption Expenditure stats for August. This report gets attention because the PCE is the Fed’s preferred measure of inflation.

The core PCE number rose by 0.6% in August which was 0.1% higher than estimates. Over the past year, core PCE rose by 4.9%. Wall Street had been expecting 4.7%.

The non-core rate rose by just 0.3% in August. Falling energy prices played a big role in keeping that number low. Either way, the annual numbers are running well above the Fed’s target of 2%.

Lael Brainard, the Vice Chair of the Fed and someone who is considered more of a dove, nevertheless spoke in strong terms regarding inflation:

“Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target,” the central bank official said in remarks prepared for a speech in New York. “For these reasons, we are committed to avoiding pulling back prematurely.”

The stock market is up so far today but it looks to close out a difficult week, month and quarter.

Posted by on September 30th, 2022 at 11:28 am


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