Inflation Eases

Inflation as measured by the Federal Reserve’s preferred gauge eased in January (The Hill).

What’s going on: “The personal consumption expenditures (PCE) price index increased by 0.3 percent in January, easing to a 2.5-percent annual increase from 2.6 percent in December. The moves were in line with economists’ expectations.”

From September to December, prices in both the PCE and larger consumer price index rose. The CPI increased last month, too, landing at 3%.
Personal spending dipped 0.2% in January.

Meanwhile … Personal incomes beat forecasts in the Commerce Department’s data release today, rising 0.9% on the month.

The big picture: Inflation is down from its June 2022 peak of 9%, but remains above the Fed’s target of 2%.

Last week’s CPI report “had reinforced the Fed’s decision in January to pause on additional rate cuts, but today’s data suggests that the central bank could still introduce more reductions this year” (CBS News).