US core PCE inflation hits 3.0% in August, below 3.3% forecast

September 30, 2026 at 05:52 PM1 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The US personal consumption expenditures price index rose 0.3% in August, putting the annual rate at 3.4%, the Commerce Department reported Wednesday. Core PCE, excluding food and energy, increased 0.2% for a 3.0% annual gain, below the 3.3% expected by economists. The softer readings come even as the Federal Reserve weighs another rate hike at its October or December meetings.

Key Facts

The headline PCE price index rose 0.3% in August, with the 12-month rate at 3.4%.
Core PCE, excluding food and energy, increased 0.2% for an annual rate of 3.0%, below the 3.3% consensus.
Personal income rose 0.2% while spending increased 0.9% in August.
Gasoline prices jumped 4.4% and transportation services accelerated by 1.4% in August.

Inflation Data

The personal consumption expenditures price index increased a seasonally adjusted 0.3% in August, putting the 12-month gain at 3.4%. Economists surveyed by Dow Jones had expected increases of 0.3% monthly and 3.7% annually. Excluding food and energy, PCE posted a 0.2% monthly increase, with the annual core level at 3.0%. The respective forecasts for core PCE were 0.3% monthly and 3.3% annually.

Fed Policy Implications

Both headline and core inflation remain considerably above the Federal Reserve's 2% target. The softer-than-expected readings raise the possibility that the Fed will follow its September rate hike with another increase at its October or December meetings. The Bureau of Economic Analysis adjusted the way it computes several components of the index, though the impact on final numbers was not immediately clear.

Price Drivers

Energy costs were the primary driver of the August price increase. Gasoline prices jumped 4.4% and transportation services accelerated by 1.4%. Energy goods and services rose 2.3% in August.