U.S. August core PCE, up 2.9% year-on-year…matches market expectations

Minseung Kang

Summary

The U.S. August core PCE price index rose 2.9% year-on-year, matching market expectations.
The indicator was reported to be a major economic indicator referenced by the U.S. central bank (Fed) when deciding interest rate policy.
CNBC analyzed that the possibility of a change in policy stance is low and that the impact on consumer prices is limited.

The U.S. core Personal Consumption Expenditures (PCE) price index for August matched market expectations (2.9%).

According to data released on the 26th (local time) by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA), U.S. core PCE for August rose 2.9% year-on-year, matching market expectations. It also rose 0.2% month-on-month, in line with experts' forecasts.

Core PCE excludes the highly volatile food and energy components. It is regarded as a key indicator that the U.S. central bank (the Fed) references ahead of policy considerations such as deciding the policy interest rate.

On the day, U.S. economic outlet CNBC said, "The U.S. central bank, the Federal Reserve (Fed), targets inflation at 2%, but this release is not expected to change the policy stance," adding, "This indicator showed that President Donald Trump's large-scale tariff policies have had a limited effect on consumer prices."