US PCE inflation gauge rises less than expected

The Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose less than economists anticipated. According to Commerce Department data, the index increased by a seasonally adjusted 0.3% for the month, resulting in a 12-month gain of 3.4%, which was below the 3.7% forecast.

Core PCE, which excludes food and energy, rose 0.2% for the month, bringing the annual core level to 3%. This was lower than the 0.3% monthly and 3.3% annual increases projected by analysts. While energy costs, including a 4.4% rise in gasoline, contributed to price increases, the overall data suggests a cooling trend in inflation.

Following the report, U.S. stock markets saw gains, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all trending upward. The data has influenced market expectations regarding Federal Reserve policy, with traders adjusting bets on whether the central bank will implement further interest rate hikes.