The Fed’s Favorite Inflation Index Just Cooled Again
The last inflation report before the general election showed price increases cooling nearly to the federal reserve's goal of a 2% annual rate. The cost of living as measured by personal. The personal consumption expenditures (pce) price index, the federal reserve's preferred inflation measure, dropped to 2. 1% last month on an annual basis, close to the central bank's goal of a 2%. The personal consumption expenditures price index, which is the fed’s preferred inflation gauge, showed prices rose 2. 1% for the year ended in september, a slowdown from 2. 3% in august. The pce index tries to account for changes in how people shop when inflation jumps.
Prices climbed just 2. 1 percent compared with a year earlier. Inflation cooled in august, the latest sign of progress in the federal reserve’s yearslong fight to bring rapid price increases back under control. Inflation peaked at 7. 1% in june 2022 after the economy had accelerated out of the pandemic recession at a time of severe shortages of parts and labor, according to the gauge released thursday, called the personal consumption expenditures price index.