Key inflation gauge shows price increases cooled again in November
Why it matters: It's the latest data to point to a slowing of still-high inflation — alongside moderating consumer spending — as the Federal Reserve raises interest rates aggressively to slow the economy in an effort to get inflation down to its 2% target.
By the numbers: The personal consumption expenditures (PCE) index rose 5.5% in the 12 months through November, down from 6.1% in the prior month.
- Core PCE, which excludes food and fuel costs, rose 4.7%, slowing from the 5% in October.
The report also offered details about consumer spending, savings and income in November. After-tax incomes rose 0.4%, outpacing the 0.1% monthly rise in the PCE index (and the 0.2% monthly rise in core PCE).
- Still, consumer spending slowed notably from the prior month. It rose just 0.1% in November as consumers spent more on housing and less on new trucks. That is down from 0.9% in October, which was revised 0.1 percentage point higher.
- The personal saving rate rose slightly to 2.4%, 0.2 percentage points higher than in October; though still among the lowest levels on record.
- In recent months, consumers have saved a much smaller portion of their income relative to the early days of the pandemic, amid lockdowns and government stimulus payments.