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An inflation gauge closely watched by Federal Reserve policymakers ticked higher in October, though it remains near the Fed’s inflation target.
The Commerce Department on Wednesday reported that the personal consumption expenditures (PCE) index rose 0.2% in October and 2.3% year over year. Those figures were in line with the estimates of economists polled by LSEG.
Core PCE, which excludes volatile food and energy prices, rose 0.3% for the month and increased 2.8% from a year ago, in line with estimates.
The Federal Reserve is focusing on the PCE headline figure as it tries to bring back the pace of price increases back to 2%, although policymakers view the core data as a better indicator of inflation. Headline PCE was up from 2.1% in September and equaled the 2.3% reading from August, suggesting that inflation ticked slightly higher, while the core PCE was little changed from last month.
The headline PCE data showed that prices for goods were down 1% from a year ago, while prices for services were up 3.9% in that timeframe. Food prices were up 1% while energy prices decreased 5.9% compared with last October.
Wages and salaries were up 0.5% in October compared with last month – a slightly higher growth rate than the 0.4% reading in September. That follows monthly wage and salary growth of 0.5% in August and 0.4% in July, which were notably higher than the preceding three months, which were close to zero.
The personal savings rate as a percentage of disposable income was 4.4% in October, up slightly from the 4.1% measurement last month – though it’s down from the roughly 5% level it was at this spring.
This is a developing story. Please check back for updates.
