Analysis: September core PCE falling short of expectations will give the Federal Reserve a green light for further rate cuts

BlockBeats News, December 5 — On Friday, the U.S. Department of Commerce released a key inflation indicator showing that the inflation rate in September was lower than expected. This report, delayed due to a government shutdown, further signals a green light for the Federal Reserve to cut interest rates. The core PCE price index, which excludes volatile food and energy prices, rose 0.2% month-over-month and 2.8% year-over-year. While the monthly rate met general expectations, the annual rate was 0.1 percentage points lower than anticipated.

In addition, according to data from the U.S. Department of Commerce’s Bureau of Economic Analysis, overall personal consumption expenditures rose 0.3% month-over-month, with the annual inflation rate also at 2.8%.

Both figures were in line with expectations. Federal Reserve officials use the PCE price index as their main policy tool for measuring inflation. While officials consider both overall and core data, they generally view the core data as a better indicator of long-term inflation trends. The report was delayed for several weeks due to the government shutdown, during which all data collection and economic reporting were suspended. (Golden Ten Data)