Increase in Core PCE Prices Slows to 1.8% vs. Year Ago
Nominal personal consumption expenditures rose 0.6% in October, stronger than expected, while core PCE prices were up 0.1% for the month, slowing the year/year rate to 1.8% after rounding, according to data released by the Bureau of Economic Analysis Thursday morning.
The 1.8% year/year rate for core PCE prices, the lowest since March, follows downward revisions after rounding to the previous two months to 1.9%, and results partially from base effects due to a larger month/month rise a year earlier. The rate sits moderately below Fed’s inflation target.
The 0.6% gain in current dollar PCE was above the 0.5% median expectation in an MNI survey and followed a 0.2% gain in September. Spending on durable goods was up 0.5% in the month, while nondurable goods spending rose 0.6% on a 2.4% increase in energy prices. Services spending was up 0.7%.
Real PCE was up 0.4% in October, as the overall PCE price index was up 0.2%. .