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A shopper browses a holiday food display while shopping for groceries ahead of the Thanksgiving Day holiday at an Albertsons supermarket in Redmond, Washington, U.S., November 24, 2025. <\/p>\n
David Ryder | Reuters<\/p>\n<\/div>\n<\/div>\n<\/div>\n
A key inflation measure was lower than expected in September, the Commerce Department said Friday in a report delayed by the government shutdown that gives a further green light for the Federal Reserve to lower interest rates.<\/p>\n
The core personal consumption expenditures price index, which excludes volatile food and energy prices, indicated a 0.2% monthly rise while the annual rate was 2.8%. The monthly rate was in line with the Dow Jones consensus, but the annual level was 0.1 percentage point lower.<\/p>\n
In addition, headline PCE increased 0.3% for the month, putting the annual inflation rate also at 2.8%, according to the department\u2019s Bureau of Economic Analysis. Both of those readings were in line with expectations.<\/p>\n
Federal Reserve officials use the PCE price index as their primary policy tool for inflation. While officials look at both measures, they generally consider core a better indicator of longer-term inflation trends.<\/p>\n
The report was put off several weeks by the government shutdown, which had caused a halt to all data collection and economic reports.<\/p>\n
In addition to the inflation figures, the report provided information on income and spending.<\/p>\n
Personal income rose 0.4% on the month while spending was up 0.3%. Income was 0.1 percentage point above the forecast, while spending was 0.1 percentage point below the forecast.<\/p>\n
Stocks added to gains following the release as traders anticipate a quarter percentage point interest rate cut from the Fed when it announces its rate decision Wednesday.<\/p>\n