{"id":3020,"date":"2025-02-28T12:47:11","date_gmt":"2025-02-28T17:47:11","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/02\/28\/pce-report-showed-inflation-eased-slightly-in-january\/"},"modified":"2025-02-28T12:47:11","modified_gmt":"2025-02-28T17:47:11","slug":"pce-report-showed-inflation-eased-slightly-in-january","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/02\/28\/pce-report-showed-inflation-eased-slightly-in-january\/","title":{"rendered":"PCE Report Showed Inflation Eased Slightly in January"},"content":{"rendered":"
\n
\n

Getting inflation under control since the worst surge in decades has been a bumpy process in recent months. New data on Friday showed a little progress, but also an unexpected pullback in consumer spending, complicating the path forward for the Federal Reserve as it debates when to restart interest rate cuts.<\/p>\n

The central bank\u2019s preferred inflation measure, released on Friday, climbed 2.5 percent in January from a year earlier, slightly lower than the previous reading of 2.6 percent but still well above the central bank\u2019s 2 percent target. On a monthly basis, prices increased 0.3 percent, in line with December\u2019s pace.<\/p>\n

The \u201ccore\u201d personal consumption expenditures price index, which strips out volatile food and energy costs and is closely watched as a gauge for underlying inflation, rose another 0.3 percent in January. Compared to the same time last year, it is up 2.6 percent, data from the Commerce Department showed. In December, it rose at an annual pace of 2.8 percent.<\/p>\n

The inflation figures were in line with what economists had expected and underscored the Fed\u2019s decision to proceed cautiously with interest rate cuts after making adjustments in the second half of last year. The interest rate set by the Fed stands at 4.25 percent to 4.5 percent.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

\n
\n

Spending fell 0.2 percent in January, led by a drop in spending on cars and other goods. Economists had expected a 0.2 percent increase overall, following a 0.8 percent increase in December. Once adjusted for inflation, spending dropped by 0.5 percentage points, which is the sharpest monthly drop in almost four years.<\/p>\n

Thomas Ryan, an economist at Capital Economics, attributed the decline in part to \u201cunseasonably severe winter weather,\u201d but warned that the Fed\u2019s job will become \u201ctrickier if January\u2019s sharp decline in consumption was a sign of consumer strength buckling.\u201d<\/p>\n

\n
\n
<\/div>\n