PCE inflation report September 2025:
A shopper browses a holiday food display while shopping for groceries ahead of the Thanksgiving Day holiday at an Albertsons supermarket in Redmond, Washington, U.S., November 24, 2025.
David Ryder | Reuters
A key inflation measure was lower than expected in September, the Commerce Department said Friday in a report delayed by the government shutdown that gives a further green light for the Federal Reserve to lower interest rates.
The core personal consumption expenditures price index, which excludes volatile food and energy prices, indicated a 0.2% monthly rise while the annual rate was 2.8%. The monthly rate was in line with the Dow Jones consensus, but the annual level was 0.1 percentage point lower.
In addition, headline PCE increased 0.3% for the month, putting the annual inflation rate also at 2.8%, according to the department’s Bureau of Economic Analysis. Both of those readings were in line with expectations.
Federal Reserve officials use the PCE price index as their primary policy tool for inflation. While officials look at both measures, they generally consider core a better indicator of longer-term inflation trends.
The report was put off several weeks by the government shutdown, which had caused a halt to all data collection and economic reports.
In addition to the inflation figures, the report provided information on income and spending.
Personal income rose 0.4% on the month while spending was up 0.3%. Income was 0.1 percentage point above the forecast, while spending was 0.1 percentage point below the forecast.
Stocks added to gains following the release as traders anticipate a quarter percentage point interest rate cut from the Fed when it announces its rate decision Wednesday.
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