US PCE Inflation Softer-than-Expected

James Hyerczyk
Updated: Sep 29, 2023, 14:18 GMT+00:00

The Commerce Department noted a 0.4% rise in August's PCE price index, versus the expected 0.5% increase.

US PCE Index


  • Core PCE comes in at 0.1%, lower than the 0.2% forecast. 
  • Personal Income rose 0.4%, matching the estimate. 
  • Personal Spending gained 0.4%, below the 0.5% forecast. 

US Personal Income, Expenditure and Inflation Analysis, August 2023

In August, a significant highlight was the augmentation in personal income by $87.6 billion or 0.4%. The landscape of disposable personal income (DPI) also evolved, registering an increase of $46.6 billion (0.2%). This movement shadowed the personal consumption expenditures (PCE), which surged by $83.6 billion or 0.4%.

Fluctuations in Consumer Price Dynamics

The Bureau of Economic Analysis recorded the PCE price index escalating by 0.4% in the same month. An intriguing observation is the resilience of this index even after omitting volatile sectors such as food and energy, indicating a rise of 0.1%. A wider lens into the year reveals a leap of the PCE price index by 3.5%, underscoring the intrinsic inflationary pressures. It’s noteworthy that the core PCE index, after extracting the impact of food and energy, reported a subdued growth of 0.1%, contrary to the Wall Street Journal’s anticipated 0.2% climb.

Decoding Consumer Behavior and Spending Patterns

The ripple effect of the increment in personal income is observed in the consumer sphere as well. The PCE’s current-dollar surge of $83.6 billion mirrors the expansion in spending for services by $47.0 billion and goods by $36.7 billion. Distinct contributors in this realm were the housing and utilities sectors, transportation services, and a pronounced spending in the healthcare landscape.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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