Inflation showed signs of easing in November, with the Federal Reserve’s preferred gauge, the personal consumption expenditures (PCE) price index, rising by just 0.1% from October and 2.4% year-over-year, according to data released by the Commerce Department on Friday (Saturday AEDT).
Both figures came in slightly below market expectations, providing a glimmer of hope amid persistent inflationary pressures.
Core PCE, which excludes volatile food and energy prices, also increased by 0.1% for the month and 2.8% over the past year, both 0.1% below forecasts. The Fed typically views the core reading as a more reliable indicator of long-term inflation trends.
Income and expenditure data underscored a mixed picture. Personal income grew by 0.3%, slightly missing the 0.4% forecast, while personal expenditures rose 0.4%, also below expectations, while the personal savings rate declined marginally to 4.4%.
The data follows the Federal Reserve’s decision last week to reduce its benchmark interest rate by a quarter percentage point to a range of 4.25%-4.5%, the lowest in two years.
However, Fed Chair Jerome Powell cautioned that the central bank is adopting a more gradual approach to rate cuts, now forecasting just two reductions in 2025, down from the four previously projected back in September.