Fed’s preferred inflation gauge rises to 2.8% in November as consumer spending stays strong
November core PCE inflation rose to 2.8% year-over-year as consumer spending rose 0.5%; figures suggest the Fed may delay rate cuts amid persistent price pressure.
Overview
PCE price index rose 2.8% year-over-year in November, up from 2.7% in October; core PCE also climbed to 2.8% annually.
Monthly inflation increased 0.2% in both October and November; the six-week government shutdown delayed reporting and complicated comparisons for economists and policymakers.
Consumer spending rose 0.5% in November, boosting GDP prospects after a 4.4% third-quarter revision and pointing to solid end-of-year growth.
Labor-market signs mixed: hiring slowed late last year, unemployment fell to 4.4% in December, while personal saving rate declined to 3.5%.
Economists say persistent above-target inflation and robust spending reduce urgency for immediate Fed rate cuts, increasing likelihood policymakers will pause at next week's meeting.
Analysis
Center-leaning sources present this as straightforward, data-driven coverage without strong editorial slant: they prioritize statistics (yearly/core/monthly CPI, spending, GDP growth), include both reassuring ("solid increase", economist quote) and cautionary details ("stubbornly elevated", hiring slowdown), and avoid partisan language or selective omission that would push a clear narrative.
Sources (8)
FAQ
The core PCE inflation rose to 2.8% year-over-year in November, up from 2.7% in October.
Consumer spending rose 0.5% in November, boosting GDP prospects.
Persistent above-target inflation at 2.8% and robust consumer spending reduce urgency for immediate rate cuts.
Projections vary: CBO expects cuts in 2026 to 3.4% by 2028; Fed dot plot implies one cut; JP Morgan predicts no cuts in 2026; markets expect one or two.
History
5 sources