Shoppers look at holiday food displays while shopping for groceries ahead of the Thanksgiving holiday at Albertsons Supermarket on November 24, 2025 in Redmond, Washington, United States.
david rider reuter
The Commerce Department said Friday in a report delayed by the government shutdown that a key inflation measure was lower than expected in September, giving the Federal Reserve permission to cut interest rates further.
The core personal consumption expenditure price index, which excludes volatile food and energy prices, rose 0.2% from the previous month, for an annualized rate of 2.8%. The monthly rate was in line with the Dow Jones Consensus, but the annual level was 0.1 percentage point lower.
Additionally, the Ministry’s Bureau of Economic Analysis said that the headline PCE rose by 0.3% in the month, and the annual inflation rate was also 2.8%. Both of these measurements were as expected.
Fed officials use the PCE price index as their primary policy tool to combat inflation. Officials consider both measures, but generally believe the core is a better indicator of long-term inflation trends.
The report was delayed for several weeks as the government shutdown halted all data collection and economic reporting.
In addition to inflation figures, the report also provided information on income and expenditure.
Personal income increased by 0.4% from the same month, and expenditures increased by 0.3%. Revenue was 0.1 percentage point higher than expected, but expenditure was 0.1 percentage point lower than expected.
Stocks rose further following the announcement, as traders expected the Fed to cut interest rates by a quarter of a percentage point when it announced Wednesday’s rate decision.
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