October’s Personal Consumption Expenditures (PCE) showed that headline inflation rose 0.2% from September, while the year-over-year reading rose from 2.1% to 2.3%. Core PCE, the Fed’s preferred measure which strips out volatile food and energyprices, rose 0.3% monthly. The year-over-year reading increased from 2.7% to 2.8%, remaining near the lowest level in over three years.
What’s the bottom line? While annual inflation did move higher in the wrong direction, the increase is partly due to a lower figure from October 2023, which was removed from the rolling 12-month calculation and replaced with October 2024’s 0.3% reading. Looking ahead, readings for January through April 2024 are higher comparisons, meaning progress lower toward the Fed’s 2%target may be easier next year when those figures are replaced.