Inflation Surge Exposed: Fed’s Preferred PCE Index Signals Persistent Price Pressure and Shrinking Consumer Power

PCE Inflation Data Shows Price Pressures Are Far From Over The Federal Reserve’s preferred inflation gauge—the Personal Consumption Expenditures (PCE) index—just delivered a clear message: inflation is not under control. Headline PCE: up 0.7% month-over-month, 3.5% year-over-year Core PCE (excluding food and energy): up 0.3% monthly, 3.2% annually These aren’t cooling numbers. In fact, headline inflation just hit its highest level in nearly three years. For all the talk about progress, the data shows inflation is proving far more persistent than expected. Why the PCE Inflation Index Matters More Than CPI Most headlines focus on CPI, but policymakers rely heavily on PCE—and for good reason: It captures broader consumer behavior Adjusts for substitution effects Provides a more dynamic view of…