Nov. 30 (UPI) — The personal consumption expenditures index, an inflation measure favored by the Federal Reserve, was flat in October as a decline in goods prices was offset by a rise in services.
The PCE price index rose less than 0.1% for October while climbing 3% from a year ago as U.S. consumer spending rose .02% for the month.
Excluding food and energy, PCE inflation was 0.2% for October and 3.5% from one year ago.
“Prices for goods decreased 0.3 % and prices for services increased 0.2%. Food prices increased 0.2% and energy prices decreased 2.6%. Excluding food and energy, the PCE price index increased 0.2 %,” the BEA Thursday statement said.
Americans spent $53.1 billion more on services in October while spending $11.9 billion less on goods, according to the Bureau of Economic Analysis.
“From the same month one year ago, the PCE price index for October increased 3%. Prices for goods increased 0.2% and prices for services increased 4.4%. Food prices increased 2.4% and energy prices decreased 4.8%. Excluding food and energy, the PCE price index increased 3.5% from one year ago,” the BEA statement said.
Personal income increased by $57.1 billion, or 0.2%. Personal saving was $768.6 billion and the saving rate was 3.8%.
“Within services, the largest contributors to the increase were health care (led by hospital and nursing home services), housing and utilities (led by housing), and other services (led by international travel), ” the BEA said.
The decline in October goods spending came largely from a decrease in motor vehicles and parts, led by new motor vehicles, along with gasoline and other energy goods.
Disposable personal income was up by $63.4 billion, or 0.3% for the month.
Compared with September, prices for goods in October dropped 0.3% while services prices were up by 0.2%. Food costs were up 0.2% while energy costs decreased by 2.6%.
At an annual rate, the PCE index was up 3.0% from the same month a year ago.
Excluding food and energy, October PCE was 0.2% for the month and up by 3.5% from a year ago in October.
The White House was quick to highlight the new numbers, releasing a statement from President Joe Biden.
“Today, we learned that annual inflation fell to its lowest level since March 2021 and monthly inflation was zero,” Biden said. “Alongside yesterday’s news that our economy grew by more than 5% last quarter, this flat inflation is helping deliver the breathing room families need right now, especially around the holidays.”
