Analysis: September Core PCE Below Expectations to Give Fed Green Light for Further Rate Cuts
BlockBeats News, December 5th: A key inflation indicator released by the U.S. Department of Commerce on Friday showed that inflation in September was lower than expected. This delayed report, due to the government shutdown, further paved the way for the Fed to cut interest rates. The core PCE price index, which excludes volatile food and energy prices, rose by 0.2% on a monthly basis and 2.8% annually. While the monthly rate was in line with general expectations, the annual rate was 0.1 percentage point lower than expected.
In addition, according to the U.S. Bureau of Economic Analysis, overall personal consumption expenditures rose by 0.3% monthly, with an annual inflation rate of 2.8%.
Both of these data points met expectations. Federal Reserve officials use the PCE price index as a key policy tool to measure inflation. While officials consider both headline and core data, they generally view core data as a better indicator of long-term inflation trends. The report was delayed by several weeks due to the government shutdown, during which all data collection and economic reporting were paused. (Krypton Finance)
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