Fed-preferred PCE price index accelerated in January

Core PCE inflation for the US rose 4.7% in January YoY, beating expectation of 4.4% increase. Compared to the previous month, the Fed-preferred price index rose 0.6%, higher than market expectation of 0.5%.

Accelerated from December’s 4.6%, the latest figure suggests that the Fed may have to tune up the strength of monetary tightening to bring down demand in the economy to achieve its 2% target.

S&P fell over 1% on Friday following the data released.

Headline PCE inflation was 5.4% YoY and 0.6% MoM, both were higher than December numbers.

Food and energy prices saw respective 0.4% and 2% increases from the previous month, as well as 11.1% and 9.6% rises from a year ago.

Sources:

Key Fed inflation measure rose 0.6% in January, more than expected (cnbc.com)

Personal Income and Outlays, January 2023 | U.S. Bureau of Economic Analysis (BEA)