Key Fed measure shows core inflation at 2.8%, in line with expectations
Inflation closed out 2024 on a strong note, as a price gauge the Federal Reserve focuses on came in well above the central bank’s target, the Commerce Department reported Friday.
Inflation closed out 2024 on a strong note, as a price gauge the Federal Reserve focuses on came in well above the central bank’s target, the Commerce Department reported Friday.
The personal consumption expenditures price index increased 2.6% on a year-over-year basis in December, 0.2 percentage point higher than the November reading and in line with the Dow Jones estimate.
Excluding food and energy, core PCE registered a 2.8% reading, also meeting expectations and the same as the prior month. Though the Fed considers both readings, historically officials have seen core as the better gauge of long-run inflation.
On a monthly basis, headline PCE rose 0.3% while core increased 0.2%, both in line with forecasts as well.
The Fed targets annual inflation at 2%, a level the price gauge has not seen since February 2021.
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