United States: annual PCE inflation reaches 3.6%

The PCE price index rose 0.5% in September and 3.6% over the year, the BEA reported on October 29. Excluding food and energy, the increases were 0.3% and 3.1%, respectively. [1]

Persistent pressure

Reuters notes that annual inflation was 3.4% in August. Renewed price pressure supports expectations of monetary tightening, without amounting to a Federal Reserve decision. [2]

Prices and volumes

Spending rose 0.5% in current dollars. After inflation, the increase was less than 0.1%, according to the BEA, which rounds it to 0.0% in its table. [1]

What spending measures

Reuters therefore describes consumption volumes as essentially flat heading into the fourth quarter. A larger total bill does not mean an equivalent increase in real purchases. [2]