September PCE: Inflation rises to 3.6%
Consumer price pressures increase as PCE index moves further from Fed's 2% target.
The Brief
- PCE index rose 0.5% monthly and 3.6% annually in September.
- Core PCE increased 0.3% monthly and 3.1% annually.
- Third-quarter GDP grew 3.4%, exceeding economists' expectations.
The Commerce Department reported that the personal consumption expenditures (PCE) index rose 0.5% in September on a monthly basis, marking a 3.6% increase from the previous year.
Core PCE, which excludes food and energy prices, increased 0.3% monthly and 3.1% annually, both figures matching economists' forecasts.
Goods prices rose 3.9% year over year, while services prices increased 3.5% in September, contributing to overall inflationary pressures.
The personal savings rate fell to 3.8% in September, down from 4% in August, continuing a two-year decline from a peak of 6.2% in April 2025.
The Bureau of Economic Analysis estimated third-quarter GDP growth at 3.4%, surpassing the 3.2% forecast by economists, with two more revisions to follow.
Federal Reserve policymakers are monitoring PCE data to guide interest rate decisions, though they prioritize core PCE as a more reliable inflation indicator.
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