PCE Report: Core Inflation Holds Steady At 2.9% In August

According to data from the Commerce Department, core PCE, which excludes food and energy, rose 0.2% over the past month.

The Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve’s preferred gauge of inflation, rose 0.3% for the month, taking the headline inflation to 2.7% in August.

According to data from the Commerce Department, core PCE, which excludes food and energy, stood at 2.9%, rising 0.2% over the past month.  PCE rose slightly from 2.6% in July, while the Core PCE remained the same. Both PCE and core PCE figures were in line with market estimates, according to data from MarketWatch. Federal Reserve policymakers view core data as a better indicator of inflation.

Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Spending rose the most last month on transportation services, hotels and restaurants, and recreational goods and services.

On Wednesday, billionaire investor Ken Griffin stated that consumers have yet to feel the full impact of President Donald Trump’s tariffs and predicted only one more rate cut this year. “The inflationary impulse from tariffs has only passed about 50% through the economy at this point. It’s still coming,” Griffin said. He added that a 3% inflation rate “could be grating to tens of millions of American households.”

Griffin said that higher import costs from the tariffs are still feeding through supply chains, keeping inflation stuck above the Fed’s 2% target. He sees only one additional quarter-point rate cut, despite slowing job growth this year, and expects inflation to remain in the mid-2% to 3% range in 2026. “The consumer’s going to pay,” he said.

U.S. equities were in the green during pre-market trade on Friday after the in-line PCE report. The SPDR S&P 500 ETF (SPY) was up 0.31%, the SPDR Dow Jones Industrial Average ETF (DIA) gained 0.47%, and the Nasdaq-100 tracking Invesco QQQ Trust (QQQ) moved 0.28% higher. Retail sentiment around QQQ on Stocktwits improved to ‘bullish’ from ‘bearish’ territory over the past day amid ‘high’ levels of chatter. 

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