Core inflation rate held at 2.9% in August, as expected, Fed’s gauge shows

Core inflation was little changed in August, according to the Federal Reserve’s primary forecasting tool, likely keeping the central bank on pace for interest rate reductions ahead.

The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.

Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.

The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.

All of the numbers were in line with the Dow Jones consensus forecast.

Spending and income numbers were slightly higher than expected.

Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Both were 0.1 percentage point above the respective estimates.

The core personal consumption expenditures price index showed inflation in August at 2.9% on an annual basis after rising 0.2% for the month. Both were in line with estimates.

Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who indicated they see two more quarter percentage point reductions before the end of the year.

Spending and income numbers were slightly higher than expected.

Core inflation rate held at 2.9% in August, as expected, Fed’s gauge shows.

Core inflation was little changed in August, according to the Federal Reserve’s primary forecasting tool, likely keeping the central bank on pace for interest rate reductions ahead.

The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.

Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.

The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.

All of the numbers were in line with the Dow Jones consensus forecast.

Spending and income numbers were slightly higher than expected.

Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Both were 0.1 percentage point above the respective estimates.

Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who last week indicated they see two more quarter percentage point reductions before the end of the year.

Stock market futures added to gains after the report while Treasury yields edged lower.

The report further indicates that President Donald Trump’s tariffs have had only a limited pass-through effect on consumer prices. Though many economists expected Trump’s expansive levies to juice prices, companies have relied on a mixture of pre-tariff inventory accumulations and cost-absorbing measures to limit the impact.