Fed’s Preferred Inflation Gauge Drops for First Time Since 2020

The Federal Reserve’s preferred inflation gauge slowed at a better-than-expected pace in November as price pressures continued to subside heading into 2024. Last month, the annual personal consumption expenditure (PCE) price index eased to 2.6 percent, down from 2.9 percent in October, the lowest reading since February 2021. This also came in below the consensus estimate of 2.8 percent. PCE also fell 0.1 percent on a month-over-month basis for the first time since April 2020, according to the Bureau of Economic Analysis (BEA). Core PCE, which excludes the volatile energy and food components, slowed to 3.2 percent year-over-year in November, down from 3.4 percent in the previous month. Core PCE clocked in just under economists’ expectations of 3.3 percent. It also edged up just 0.1 percent monthly....