The September Personal Income and Outlays report from the U.S. Bureau of Economic Analysis showed that the headline personal consumption expenditures (PCE) price index rose by 3.6% year over year, up 0.2 percentage points from August but in line with expectations. Core PCE inflation (excluding food and energy prices) increased 3.1% year over year, meeting expectations but up from 3% in August. Over the month, gasoline and other energy goods prices rose 9.2%.
The ABA Office of the Chief Economist believes the September data highlights the strength of aggregate demand and the persistence of inflationary pressures, with sustained energy price increases contributing to the acceleration in headline inflation. PCE inflation continues to move away from the Federal Reserve’s 2% target. Persistent price growth could pressure household budgets, and impact consumer credit performance as consumers contend with rising costs and higher energy prices.
