PCE

Aug. 29 (UPI) — Inflation rose in July, according to the Personal Income and Outlays report from the Bureau of Economic Analysis, the Fed’s preferred measure.

Core inflation, which excludes food and energy costs, was at a 2.9% seasonally adjusted annual rate, according to the personal consumption expenditures price index. That showed a rise of 0.1% from June and the highest annual rate since February.

The core PCE index increased 0.3% monthly, which is in line with expectations, CNBC reported.

Personal outlays, which is the sum of PCE, personal interest payments, and personal current transfer payments, increased $110.9 billion in July. Personal saving was $985.6 billion in July, and the personal saving rate — personal saving as a percentage of disposable personal income — was 4.4%.

The increase in current-dollar personal income in July primarily reflected an increase in compensation. Personal income increased $112.3 billion, 0.4% at a monthly rate, in July. Disposable personal income — income less personal current taxes — increased $93.9 billion or 0.4%.

Many policy-makers consider core inflation to be a better indicator of trends because it excludes the gas and groceries figures, which are volatile, CNBC said. Central bankers prefer inflation at 2%. Friday’s report shows the economy isn’t near where the Fed wants it.

“The Fed opened the door to rate cuts, but the size of that opening is going to depend on whether labor-market weakness continues to look like a bigger risk than rising inflation,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, to CNBC. “Today’s in-line PCE Price Index will keep the focus on the jobs market. For now, the odds still favor a September cut.”

June 27 (UPI) — The U.S. Bureau of Economic Analysis announced Friday that core inflation jumped higher than expected last month.

The BEA said in a press release that the personal consumption expenditures, or PCE, price index for May rose 0.1%, and if food and energy are excluded from the data, the index rose 0.2%.

This bumps the annual inflation rate up to 2.3%, or 2.7% when food and energy are left out of the math.

Economists surveyed by Dow Jones had been expecting the 0.1% and 2.3% but only estimated the numbers would hit 0.1% and 2.6% minus energy and food.

“This morning’s news was consistent with other reports showing the economy gradually losing momentum in the second quarter,” said Wells Fargo Investment Institute market strategist Gary Schlossberg to CNBC Friday.

Schlossberg added that this was “ahead of the brunt of tariff increases expected to wash ashore during the summer and early fall.”

The inflationary uptick got its biggest boost from service prices, which are 3.4% higher than a year ago, while goods only moved upwards by 0.1%.

Inflation pressures in May showed a 0.2% price increase in food, but that was balanced by a 1% decline in energy-related goods and services costs. Shelter prices, on the other hand, went up 0.3%.

The BEA also reported Friday that personal income decreased $109.6 billion in May, or 0.4% at a monthly rate. When personal current taxes are subtracted from personal income, the current disposable personal income, or DPI, went down around $125 billion, or 0.6%.

May 30 (UPI) — April personal consumption expenditure inflation was up just 0.1% for an annual rate of 2.1%, according to a Friday Bureau of Economic Analysis report.

“From the same month one year ago, the PCE price index for April increased 2.1%,” the BEA report said. “Excluding food and energy, the PCE price index increased 2.5% from one year ago.”

For the month, PCE inflation met the Dow Jones consensus forecast, but the annual rate was 0.1% lower than expected.

“From the preceding month, the PCE price index for April increased 0.1%. Excluding food and energy, the PCE price index also increased 0.1%.,” the BEA said.

Spending on housing and utilities services was up 24.7% in April, heath care services spendingincresed by 20.3%.

Gasoline spending was up 8.1%.

Spending on food and beverages, vehicles, recreational goods, financial services, insurance, clothing, footwear and motor vehicle parts all declined.

The BEA also reported personal income in the United States was up 0.8% in April.

“Disposable personal income (DPI)-personal income less personal current taxes-increased $189.4 billion (0.8%) and personal consumption expenditures (PCE) increased $47.8 billion (0.2%),” the BEA said in a statement.

The income increase reflected both compensation increases and higher government social benefits to individuals, according to the BEA.

In April there was a $47.8 billion increase in current-dollar PCE – comprised of a $55.8 billion rise in spending on services partially offset by an $8 billion decrease in spending for goods.

Personal savings amounted to $1.12 trillion in April while the personal saving rate was 4.9%. That rate is saving as a percentage of disposable personal income.