A key gauge of consumer inflation fell on a monthly basis in November, the first decline since April 2020.
The personal consumption expenditure (PCE) price index fell 0.1 percent in November, the Commerce Department said Monday. Compared with a year ago, the index is up 2.6 percent, the lowest rate of 12-month inflation since March of 2021.
Economists had expected the PCE price index to hold steady for the second consecutive month.
Core prices, which exclude food and energy, rose 0.1 percent, matching the consensus forecast. Compared with a a year ago, core prices are up 3.2 percent.
Consumer spending rose 0.2 percent, also matching the consensus forecast. The prior month was revised to show a 0.1 percent gain, down from the preliminary report of 0.2 percent.
Personal incomes climbed 0.4 percent in November.
The Federal Reserve uses the PCE price index to measure its progress on bringing inflation down to two percent a year. Inflation has been above the target since March of 2021, peaking at 7.1 percent in June of 2022. In response to soaring inflation, the Fed raised its benchmark interest rate from just above zero to a range of 5.25 to 5.50 from March of 2022 through July. Since this summer, the Fed has been on hold and recently began indicating that it expects to cut rates next year.
