What happened
The US Federal Reserve's preferred measure of inflation, the personal consumption expenditures price index, rose by 3.4 percent over the past 12 months through August, which is lower than the expected 3.7 percent increase. The index climbed 0.3 percent for the month, below the forecasted 0.4 percent increase.
The core PCE prices, which exclude food and energy, rose by 0.2 percent for the month and 3 percent year-over-year. Goods prices and services both rose by 0.3 percent in August compared to July. Energy prices were the main driver of inflation, with energy goods and services rising 2.3 percent, driven by a 4.4 percent increase in gasoline prices.
The Commerce Department also reported that the economy grew at a faster pace in the second quarter than previously thought, with gross domestic product increasing at an annualized rate of 2.2 percent. This upward revision reflects larger contributions from consumer spending, investment, and government expenditures.
