A gauge the Federal Reserve uses for inflation rose slightly in November and edged closer to the central bank’s goal.
The core personal consumption expenditures price index, which excludes volatile food and energy prices, increased 0.1% for the month, and was up 3.2% from a year ago, the Commerce Department reported Friday.
Economists surveyed by Dow Jones had been expecting respective increases of 0.1% and 3.3% respectively.
Elsewhere in the report, consumer expenditures in November increased 0.3% while income rose 0.4%, numbers that were in line with expectations and indicative that spending was continuing apace despite ongoing inflation pressures.
Including food and energy costs, so-called headline PCE actually fell 0.1% on the month and was up just 2.6% from a year ago, after peaking above 7% in mid-2022.
The 12-month numbers are significant in that both show inflation making continued progress toward the Fed’s 2% target.
The Fed prefers PCE as an inflation measure over the more widely followed CPI as the former focuses more on what consumers actually spend rather than the latter’s measure of what goods and services cost. The central bank is more concerned with core prices as a longer-run inflation gauge.
November’s report reflected a shift in consumer appetite, as prices for services increased 0.2% while goods slumped 0.7%. A 2.7% slide in energy prices and a 0.1% decrease in food helped hold back inflation for the month.
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