The Federal Reserve’s preferred metric to gauge inflation increased by 0.3% in August, compared to 0.2% in the previous month, the U.S. Bureau of Economic Analysis (BEA) reported Friday morning.
The Personal Consumption Expenditures (PCE) Price Index, which measures the value of goods and services, increased 2.7% annually last month, according to the BEA. Meanwhile, core PCE, which excludes food and energy items, rose by 2.9% in August, the BEA reported.
The PCE price index was projected to be 2.7% over the 12 months ending in August, while core PCE was expected to rise by 2.9%, the Federal Reserve Bank of Dallas reported on Tuesday. In July, the PCE price index saw a year-over-year increase of 2.6%, while core inflation rose 2.9%, the BEA reported on August 29. (RELATED: Fed’s Jerome Powell Signals Cautious Approach To Future Rate Cuts)
WASHINGTON, DC – SEPTEMBER 17: Federal Reserve Chair Jerome Powell holds a news conference following a two-day meeting of the Federal Open Market Committee at the Federal Reserve on September 17, 2025 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)
The release of Friday’s PCE report comes after U.S. real gross domestic product (GDP) grew stronger than anticipated in the second quarter of 2025. The nation’s GDP increased at an annual rate of 3.8% in the second quarter, the BEA reported on Thursday.
Moreover, wholesale inflation declined unexpectedly in August, with the producer price index decreasing by 0.1%, the Bureau of Labor Statistics (BLS) reported on Sept. 10. Meanwhile, job growth slowed last month, with the U.S. economy adding just 22,000 nonfarm payroll jobs, according to BLS data released Sept. 5.
The Fed announced on Sept. 17 it was lowering interest rates by a quarter of a percentage point, which notably marked the first rate cut of this year.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.