Breakfast cereals are displayed for sale in Medford, Massachusetts, U.S., April 22, 2025.
Brian Snyder | Reuters
Core inflation was little changed in August, according to the Federal Reserve’s primary forecasting tool, likely keeping the central bank on pace for interest rate reductions ahead.
The personal consumption expenditures price index posted a 0.3% gain for the month, putting the annual headline inflation rate at 2.7%, the Commerce Department reported Friday.
Excluding food and energy, the more closely followed core PCE price level was 2.9% on an annual basis after rising 0.2% for the month.
The headline annual inflation rate was a slight increase from the 2.6% in July while the core rate was the same.
All of the numbers were in line with the Dow Jones consensus forecast.
Though the Fed targets inflation at 2%, the readings are unlikely to change course for policymakers who last week indicated they see two more quarter percentage point reductions before the end of the year.
Spending and income numbers were slightly higher than expected.
Personal income increased 0.4% for the month, while personal consumption expenditures accelerated at a 0.6% pace. Both were 0.1 percentage point above the respective estimates.
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