Fed’s preferred inflation gauge in November was lower than expected, but remains elevated

Published On Dec 20, 2024, 10:54 AM

The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) index, reported an increase of only 0.1% in November, below expectations. Year-over-year, the PCE index rose to 2.4%, also less than predicted. Core PCE, which excludes food and energy, similarly increased by 0.1% and is up 2.8% year-over-year. Despite these lower-than-expected inflation figures, they still exceed the Fed's target of 2%. Personal consumption spending rose less than forecasted, while personal incomes saw a decline. This data comes following a recent 25 basis point rate cut by the Federal Reserve, indicating the central bank's careful approach to managing inflation while supporting economic growth.