Weather 
This story about the February 2026 PCE inflation is developing and will be updated with more details.
The Federal Reserve’s preferred inflation gauge remained stubbornly high in February as consumers continued to face elevated price growth.
The Commerce Department on Thursday reported that the personal consumption expenditures (PCE) index rose 0.4% on a monthly basis in February and is up 2.8% from a year ago. Both figures were in-line with the expectations of economists polled by LSEG.
Core PCE, which excludes volatile measurements of food and energy prices, was up 0.4% from a month ago and increased 3% year over year. Both figures were in line with economists’ expectations from the LSEG poll.
FED OFFICIAL SAYS INTEREST RATE HIKE POSSIBLE AS GAS PRICES, INFLATION REMAIN ELEVATED
Federal Reserve policymakers are focusing on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Compared with January’s readings, headline PCE inflation held steady at 2.8%, while core PCE decreased slightly from 3.1%.
Prices for goods were up 1.2% in February on an annual basis, down from 1.3% in January. Goods price growth had slowed over the course of 2025, declining from an annual reading of 4.2% in January 2025 to 0.1% in December.
Services prices were up 3% from a year ago in February, an increase from the 2.6% reading in January. The index was last this high in January 2025, when prices for services were up 2.9% on an annual basis.
IRAN WAR COULD PUSH INFLATION HIGHER THIS YEAR, GOLDMAN SACHS SAYS
The personal savings rate as a percentage of disposable income was 4% in February, a decline from the 4.5% reading in January that returned the figure closer to the 3.9% level reported in December.
Over the last year, the personal savings rate as a share of disposable income has declined from 5.2% last February and a peak of 5.5% in April 2025.
The February PCE report was delayed by the government shutdown and was originally scheduled for release late last month. The March edition of the PCE inflation report is scheduled for release on April 30.
POWELL WARNS OF NEW ENERGY SUPPLY SHOCK AS GAS PRICES SURGE: ‘NO ONE KNOWS HOW BIG IT WILL BE’
What experts are saying
Bret Kenwell, U.S. investment analyst at eToro, noted that the PCE report “doesn’t reflect the recent surge in energy prices, but tomorrow’s CPI update will begin to capture some of that impact. For that reason, both the Fed and investors will be paying close attention to the remaining inflation reports this month.”
“February’s PCE inflation report was in-line with expectations, and while core PCE cooled to its lowest level since November, it’s still hovering near a one-year high of about 3%. Headline PCE remains sticky as well, holding in the 2.8%, while goods inflation continues to act as a headwind – something the Fed has linked to tariffs,” Kenwell explained.
Raymond James chief economist Eugenio Aleman noted that the “strong 0.4% print for both the headline and core PCE price indices is not good news for the Federal Reserve and will definitely keep the Fed on the sidelines for almost the rest of the year.”
