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U.S. Core CPE Jumps Most in 4 Months

Resilient household demand, paired with a pickup in inflation, created momentum heading into the fourth quarter.

By Reade Pickert | October 27, 2023 at 05:37 PM
Money changes hands at a Best Buy Co. store in Louisville, Kentucky on November 23, 2017. Photographer: Luke Sharrett/Bloomberg

The Federal Reserve’s preferred measure of underlying inflation accelerated to a four-month high in September, and consumer spending picked up, keeping the door open to another interest-rate hike in the months ahead.

The core personal consumption expenditures (PCE) price index, which strips out the volatile food and energy components, rose 0.3 percent in September, according to the Bureau of Economic Analysis (BEA) report out Friday. Inflation-adjusted consumer spending jumped 0.4 percent last month.

Resilient household demand, paired with a pickup in inflation, underscores momentum heading into the fourth quarter. While economists generally expect consumer spending to slow in the coming months, Fed officials have warned that strong data could lead them to keep tightening.

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