Core PCE Price Index in US Slows, But Remains Elevated

2.8% Annual Increase, Lowest Since March 2021

The Core Personal Consumption Expenditure (PCE) Price Index, a key inflation measure closely watched by the Federal Reserve, rose by 2.8% over the past year, marking the slowest annual increase since March 2021. This represents a slight moderation from the 2.9% increase recorded in December.

On a monthly basis, the Core PCE Price Index remained unchanged from January to February, holding steady at 0.3%. However, this figure is still above the long-term average of 0.26%.

Federal Reserve's Inflationary Benchmark

The Core PCE Price Index is the Federal Reserve's primary inflation measure, as it captures price changes for a wide range of goods and services consumed by households. The Fed's target inflation rate is 2%, and the Core PCE Price Index is used to assess progress towards this goal.

Conclusion

While the recent slowdown in the Core PCE Price Index is a positive sign, inflation remains elevated and well above the Fed's target. The Fed is likely to continue raising interest rates gradually in an effort to bring inflation under control. The path of inflation and the Fed's response will continue to be closely monitored in the coming months as the economy faces ongoing challenges.