The Federal Reserve’s preferred inflation gauge showed prices rose as expected in January at a pace that remains above the central bank’s target level as its efforts to tamp down inflation continue.
The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index was up 0.3% from the prior month and 2.5% on an annual basis. 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 2.6% from a year ago, in line with estimates.
Federal Reserve policymakers are focusing on the PCE headline figure as they try to slow the pace of price increases to their target of 2%, though they view core data as a better indicator of inflation. Headline PCE declined slightly from 2.6% in December, while core PCE dropped from 2.9% last month.
Headline PCE showed that prices for goods increased 0.5% in January after they had been relatively flat in recent months. Prices for services rose 0.2% last month, which was a slower pace than the 0.4% in December.
Wages and salaries were up 0.4% in January from a month ago, the same as the increase seen in December.
The personal savings rate as a percentage of disposable income was 4.6% in January, the highest rate recorded since 4.8% in June.
This is a developing story. Please check back for updates.
