The PCE price index rose 3.4% from a year earlier in August and 0.3% from July, the Bureau of Economic Analysis said, with the core index up 3.0% over the year.
By the numbers: Consumer spending rose $190.8 billion, or 0.9%, in August, up from a 0.1% gain in July. Goods accounted for $114.1 billion of the increase and services $76.7 billion.
- Personal income rose $66.6 billion (0.2%), led by private wages and salaries along with Medicare and Social Security benefits.
Yes, but: Inflation-adjusted after-tax income was flat in August after a 0.3% July gain, and the personal saving rate fell to 4.1%, equal to $990.2 billion set aside.
Zoom in: Monthly price pressure picked up. The PCE index rose 0.3% in August against 0.1% in July, and the core index excluding food and energy rose 0.2% against 0.1%.
Why it matters: The Federal Reserve targets 2% on this gauge, so a 3.4% annual rate keeps pressure on borrowing costs. The September report lands on October 29.
