The PCE index, a key gauge of U.S. inflation, rose a mild 0.3% in September, aided by the lower cost of gas. Yet prices are still going up even if they aren’t climbing as fast as they were earlier in the year.
The numbers: A key gauge of U.S. inflation rose a mild 0.3% in September, aided by the lower cost of gas. Yet prices are still going up even if they aren’t climbing as fast as they were earlier in the year.
The Federal Reserve views the PCE index as the best barometer of inflation trends. What it’s shown lately are easing but still-high price pressures. They might substitute cheaper goods such as ground beef for more expensive ones like ribeye to keep their costs down. Or stay at a cheaper “airbnb” instead of a hotel.Big picture: The rate of inflation is no longer soaring like it did earlier in the year, but prices are still going up. And that’s putting pressure on the Federal Reserve to keep raising interest rates until inflation cools considerably more than it has.
Many economists and business leaders now predict a recession in 2023. Only a sharp and rapid slowdown in inflation is likely to avert one, they say.