Federal Reserve’s Preferred Inflation Metric Decelerates to 2.2 Percent

Core PCE, which excludes food and energy, ticked up to 2.7 percent.

A man shops at a home improvement store in New York City on Aug. 14, 2024. Spencer Platt/Getty Images

The Federal Reserve’s preferred inflation gauge—the personal consumption expenditure (PCE) price index—came in below expectations, suggesting that the central bank is inching closer to its 2 percent target.

According to the Bureau of Economic Analysis (BEA), the PCE price index rose by 0.1 percent in August, down from the 0.2 jump in July.