Fed’s Favored Inflation Gauge Rises Less Than Expected

The Federal Reserve’s preferred inflation gauge rose less than anticipated in November (CNN).

What’s going on: “The Personal Consumption Expenditures price index rose 2.4% in November from the year before, heating up from the 2.3% increase notched in October, according to new Commerce Department data released Friday.”

On a monthly basis, PCE inflation increased 0.1% in November, below the 0.2% forecast by Wall Street.
On an annual basis, prices rose 2.8%, the same as October’s reading. Economists had expected a 2.5% annual rise.

Core PCE: So-called core PCE—which excludes often-volatile food and energy costs—inched up at its slowest monthly pace since May.

What it means: “Inflation has cooled substantially this year but has been moving sideways in recent months, prompting the Fed to take a more cautious approach to rate cuts in the coming year. Fed Chair Jerome Powell said Wednesday that there’s been ‘significant progress’ on inflation, but uncertainty also is growing.”