Personal Consumption Expenditures (PCE)

April 2023

Today’s PCE inflation report shows that although the Fed’s preferred inflation measure has fallen from its peak, inflation remains too high for the Fed to declare victory. The important core PCE rate has been moving sideways for six months, with year-over-year readings hovering between 4.6% and 4.8%. That is more than double the Fed’s 2% inflation target. The year-over-year core PCE figure is only slightly higher than the one-month, three-month, and six-month annualized rates of 4.7%, 4.3%, and 4.5%. This indicates future declines in the core PCE rate will be more difficult to attain. The takeaway is this: The Fed has more work to do.

Headline PCE:

+0.4% seasonally adjusted in April, following +0.1% in March

+4.4% year-over-year

+3.1% latest 3 months annualized

+3.5% latest 6 months annualized

Core PCE: (excludes food and energy)

+0.4% seasonally adjusted in April, following +0.3% in March

+4.7% year-over-year

+4.3% latest 3 months annualized

+4.5% latest 6 months annualized

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Long-Term Chart of Headline and Core PCE Price Index Year over Year Change:

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Summary Tables from BEA.gov PCE report:

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Percent change from the same month one year ago:

Source: BEA.gov

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