September Core PCE Inflation Falls to 2.8%, Supporting Potential Fed Rate Cut

The U.S. Commerce Department reported on December 5 that the PCE price index rose 0.3% month-over-month in September, pushing the annual rate to 2.8% from 2.7% in August, Jin10 reports. Core PCE inflation, excluding food and energy prices, declined to 2.8% from 2.9% in August. The Fed's preferred inflation gauge remained below 3% with moderate monthly increases, potentially supporting a rate cut at next week's meeting. A government shutdown delayed October inflation and November employment data, leaving officials to assess policy based on outdated indicators as they balance elevated inflation against cooling labor market conditions.