Inflation Gauge Shows Moderate Rise Despite High Prices

The Federal Reserve's preferred inflation indicator, the personal consumption expenditures (PCE) price index excluding food and energy, rose less than expected in August, increasing by 0.1% compared to the expected 0.2% gain. On a 12-month basis, the annual increase for core PCE was 3.9%, matching forecasts. Consumer spending also slowed, rising 0.4% on a current-dollar basis, down from 0.9% in July. The Fed has been raising interest rates but skipped the September meeting to assess the impact of previous hikes. Several Fed officials have indicated that interest rates are likely to remain elevated for an extended period.