December Inflation Meets Expectations

2025-02-01 00:30:00 ET

Summary

• The Personal Consumption Expenditures Price Index grew at a continuously compounding annualized rate of 3.1 percent in December 2024, up from 1.5 percent in the prior month.
• Core PCEPI grew at a continuously compounding annualized rate of 1.9 percent in December 2024, up from 1.3 percent in the prior month.
• Headline inflation rates will almost certainly decline over the next three months.

The latest inflation data from the Bureau of Economic Analysis largely confirm market expectations. The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve's preferred measure of inflation, grew at a continuously compounding annualized rate of 3.1 percent in December 2024, up from 1.5 percent in the prior month. PCEPI inflation has averaged 2.2 percent over the last six months and 2.5 percent over the last twelve months....

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