Inflation as measured by Personal Consumption Expenditures likely accelerated in November, mirroring the trend of a different inflation measure, the Consumer Price Index, released earlier in the month.
by Diccon Hyatt
Investopedia
:max_bytes(150000):strip_icc():format(webp)/GettyImages-2189155330-d216949b60a74999bb87b567a7f610c8.jpg)
Not long ago, the Federal Reserve’s favorite measure of inflation looked tantalizingly close to the central bank’s goal of a 2% annual rate. But in November, it likely headed in the wrong direction.
A report from the Bureau of Economic Analysis due Friday is likely to show that the cost of living, as measured by Personal Consumption Expenditures (PCE), rose 2.5% over the year in November, up from a 2.3% annual increase in October, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.
The trend would mirror the uptick in inflation seen in a different measure, the Consumer Price Index, released earlier this month. Officials at the Federal Reserve pay closer attention to PCE when setting the nation’s monetary policy. So Friday’s report could have a bigger impact on the trajectory of the central bank’s key interest rate and, hence, borrowing costs on all kinds of loans down the road.