Inflation slowed to its lowest level in seven months in January, according to a key measure of price changes released Friday morning, though the Federal Reserve’s favored inflation metric remains stuck above policymakers’ goal.
The Commerce Department’s personal consumption expenditure (PCE) index rose 2.5% from January 2024 to last month. And core PCE, which excludes the often volatile price swings of the often volatile price swings of food and energy, rose 2.6% year-over-year, also meeting forecasts of 2.6% core inflation.
Core PCE inflation, which is the Fed’s preferred inflation measure since 2000, was the lowest it’s been since June’s 2.6% last month, though it’s been above the 2% target every month dating back to February 2021. The headline and core PCE indexes rose 0.3% on a month-to-month basis.