As of January 31, 2025, the Bureau of Economic Analysis (BEA) released the latest data on the Personal Consumption Expenditures (PCE) Price Index. The PCE Price Index measures the prices paid by consumers in the United States for goods and services and is a key indicator of inflation.
Key Highlights:
Overall PCE Price Index: In December 2024, the PCE Price Index increased by 2.6% compared to the same month in the previous year. This follows year-over-year increases of 2.4% in November and 2.3% in October 2024.
Core PCE Price Index: Excluding the more volatile categories of food and energy, the Core PCE Price Index rose by 2.8% year-over-year in December 2024, consistent with the increases observed in November and October 2024.
The Core PCE Price Index is closely monitored by the Federal Reserve as it provides insight into underlying inflation trends by excluding categories with prices that tend to fluctuate more dramatically.
Additionally, the Federal Reserve Bank of Cleveland provides daily nowcasts of inflation for both the PCE and Consumer Price Index (CPI). As of January 31, 2025, the nowcasted year-over-year PCE inflation for January 2025 is 2.34%, with a core PCE inflation nowcast of 2.52%.
These metrics are essential for understanding current economic conditions and for informing monetary policy decisions.
