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Fed’s favored inflation gauge showed price pressures stayed elevated in December
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The Federal Reserve’s preferred inflation gauge remained elevated in December as price pressures continued to pose a challenge for consumers.
The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index rose 0.4% in December on a monthly basis and is up 2.9% from a year ago. Those figures were both slightly hotter than the estimate of LSEG economists, who predicted 0.3% and 2.8%, respectively.
Core PCE, which excludes volatile measurements of food and energy prices, was up 0.4% on a monthly basis and rose 3% year over year. Both figures were hotter than the expectations of economists polled by LSEG, who estimated the gauges would rise 0.3% and 2.9%, respectively.
Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation.
Headline PCE has trended up to 2.9% after readings of 2.8% in November and 2.7% in October. Core PCE readings were 2.8% or 2.9% dating back to May before it reached 3% in December.
This is a developing story about the December PCE inflation report. Please check back for updates.