The Fed's Preferred Inflation Gauge Rose Less Than Expected in February

The core PCE Price Index rose 0.3% in February, below projections of 0.4%

Grocery Prices at Supermarket

Spencer Platt / Staff / Getty Images

The Federal Reserve’s preferred gauge of inflation rose less than expected in February, boosting optimism policymakers might be able to pull back on their aggressive efforts to fight high prices.

The Commerce Department’s core Personal Consumption Expenditures (PCE) Price Index, which leaves out volatile food and energy prices, was up 0.3% after a downwardly-revised 0.5% gain in January. The annual increase of 4.6% was also less than the month before. Both were below economists’ estimates.

The headline index gained 0.3% as well, and was up 5% year-over-year. Those, too, were below forecasts.

Food prices advanced 0.2%, while energy costs declined 0.4%. Overall goods prices were 0.2% higher, while prices for services added 0.3%.

Personal Income Rises

Personal income climbed 0.3%, half of the gain in January but still above projections. Personal spending increased 0.2%, well below the 2% jump the month before and short of expectations.

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  1. U.S. Bureau of Economic Analysis. "Personal Consumption Expenditures Price Index: February 2023."

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