US PCE inflation eases to 3.1 per cent in September, below 3.6 per cent expected
The monthly readings in the same release picked up pace, which cuts against the annual figure.
Published · Updated
UpdateThursday, October 29, 2026 at 8:33 AM ET
The headline PCE index rose 0.5 per cent on the month in September, after a 0.3 per cent rise in August. The core index rose 0.3 per cent on the month. Personal income rose 0.2 per cent in September, the second month running at that pace. Personal spending rose 0.5 per cent, slowing from 0.9 per cent in August. The US economy grew 3.4 per cent in the third quarter, according to the Bureau of Economic Analysis. The GDP price index rose 2.3 per cent quarter on quarter. The bureau will revise the third-quarter estimate on November 25 and again on December 23. Cook and Hammack voted for a rate increase on October 28. Hotter consumer price index readings had already led Hammack, Goolsbee and Col
UpdateThursday, October 29, 2026 at 8:33 AM ET
Core PCE, the measure that excludes food and energy prices, rose 0.3 per cent on the month in September, according to the official release. The published piece described the monthly readings as rising faster but did not give the core monthly figure.
The US personal consumption expenditures (PCE) price index, a closely watched measure of inflation, was up 3.1 per cent in September from a year earlier. That is below the 3.4 per cent of the previous reading and the 3.6 per cent expected.
The same release showed the headline and core PCE readings rising faster month on month. Core PCE is the version that excludes food and energy prices. The monthly picture still points to sticky inflation, while the annual figure points the other way.
The Federal Reserve held its key rate at 3.75 to 4.00 per cent on October 28. The vote was 10-2, with two members in favour of an increase. Hammack was one of them. JPMorgan and Principal expect the Fed to raise rates in December. BofA Global Research expects two quarter-point rises, in December and March.
The Fed’s October 28 statement said inflation remains elevated and economic activity is expanding at a strong pace. Job gains kept pace with the workforce, and the unemployment rate changed little. Officials said more data in the coming period would help shape future decisions. At the press conference, Fed Chair Warsh cited double-digit business investment and GDP growth above 3 per cent. He also said he does not believe in forward guidance outside a crisis.
The annual reading works against the monthly one. The hawkish dissenters built their case for a December move on the kind of sticky inflation the monthly figures still show. This annual cooling gives the Fed’s “more information” line a data point that argues the other way. The majority held rates and deferred judgment. It now has a reading it can cite while the monthly acceleration remains unresolved.
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