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US DATA: Core PCE Inflation Continues To Hover Above 2% Target

US DATA
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  • Core PCE inflation was as expected in September at 0.25% M/M, against a median estimate of 0.3% but with detailed analyst estimates averaging 0.25/0.26% M/M after CPI/PPI/import price releases.
  • Instead, the surprising strength seen in yesterday’s Q3 release came earlier in the quarter, with August revised up from 0.13 to 0.156% M/M and July up from 0.158% to 0.17% M/M.
  • It left both three- and six-month run rates at 2.3% annualized, with the three-month climbing further from 1.9% in July but the six-month down from 2.5% in Aug and its lowest since Dec 2023.
  • The year-ago rate fractionally surprised to the upside on a rounded basis, in a close call at 2.65% Y/Y (cons 2.6) after an upward revised 2.72% (initial 2.68%) in August.
  • Core PCE services ex-housing seems to receive less attention now but it continues to remain more firmly above the inflation target despite a further notable cooling in trend terms.
  • It increased 0.30% M/M in September after 0.20% (revised up from 0.16) and 0.216% (revised up from 0.20).
  • That leaves the three-month “supercore” PCE rate at 2.9% annualized, now up from 2.3% in July, although the six-month rate has continued to trend lower to 2.7% annualized for technically its lowest since Nov 2020. 
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  • Core PCE inflation was as expected in September at 0.25% M/M, against a median estimate of 0.3% but with detailed analyst estimates averaging 0.25/0.26% M/M after CPI/PPI/import price releases.
  • Instead, the surprising strength seen in yesterday’s Q3 release came earlier in the quarter, with August revised up from 0.13 to 0.156% M/M and July up from 0.158% to 0.17% M/M.
  • It left both three- and six-month run rates at 2.3% annualized, with the three-month climbing further from 1.9% in July but the six-month down from 2.5% in Aug and its lowest since Dec 2023.
  • The year-ago rate fractionally surprised to the upside on a rounded basis, in a close call at 2.65% Y/Y (cons 2.6) after an upward revised 2.72% (initial 2.68%) in August.
  • Core PCE services ex-housing seems to receive less attention now but it continues to remain more firmly above the inflation target despite a further notable cooling in trend terms.
  • It increased 0.30% M/M in September after 0.20% (revised up from 0.16) and 0.216% (revised up from 0.20).
  • That leaves the three-month “supercore” PCE rate at 2.9% annualized, now up from 2.3% in July, although the six-month rate has continued to trend lower to 2.7% annualized for technically its lowest since Nov 2020.