Core inflation in February hits 2.8%, higher than expected; spending increases 0.4%

[BumRushDaShow]

Source: CNBC

Published Fri, Mar 28 2025 8:33 AM EDT Updated 6 Min Ago


The Federal Reserve’s key inflation measure rose more than expected in February while consumer spending also posted a smaller than projected increase, the Commerce Department reported Friday.

The core personal consumption expenditures price index showed a 0.4% increase for the month, the biggest monthly gain since January 2024, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and and 2.7%.

Core inflation excludes volatile food and energy prices and is generally considered a better indicator of long-term inflation trends. In the all-items measure, the price index rose 0.3% on the month and 2.5% from a year ago, both in line with forecasts.

At the same time, the Bureau of Economic Analysis report showed that consumer spending accelerated 0.4% for the month, below the 0.5% forecast. That came as personal income posted a 0.8% rise, against the estimate for 0.4%.

Read more: https://www.cnbc.com/2025/03/28/pce-inflation-february-2025-.html

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Article updated.

Previous article/headlines -

Core inflation in February hits 2.8%, hotter than expected; spending increases 0.4%

Published Fri, Mar 28 2025 8:33 AM EDT Updated 3 Min Ago


The Federal Reserve's key inflation measure rose more than expected in February while consumer spending also posted a smaller than projected increase, the Commerce Department reported Friday. The core personal consumption expenditures price index showed a 0.4% increase for the month, putting the 12-month inflation rate at 2.8%.

Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and 0.3% and 2.7%. Core inflation excludes volatile food and energy prices and is generally considered a better indicator of long-term inflation trends. In the all-items measure, the price index rose 0.3% on the month and 2.5% from a year ago, both in line with forecasts.

At the same time, the Bureau of Economic Analysis report showed that consumer spending accelerated 0.4% for the month, below the 0.5% forecast. That came as personal income posted a 0.8% rise, against the estimate for 0.4%.

Fed officials focus on the PCE inflation reading as they consider it a broader measure that also adjusts for changes in consumer behavior and places less of an emphasis on housing than the Labor Department's consumer price index.

This is breaking news. Please refresh for updates.

Original article/headline -

Core inflation in February hits 2.8%, hotter than expected; income jumps 0.8%

Published Fri, Mar 28 2025 8:33 AM EDT Updated 1 Min Ago


The personal consumption expenditures price index was expected to increase 0.3% in February while spending was projected to rise 0.5%, according to the Dow Jones consensus.

This is breaking news. Please refresh for updates

[surfered]

1. But the core inflation rate excludes food prices.

[BumRushDaShow]

2. Yeah because it IS so volatile

based on outside factors like the weather, the woes of animals and plants (diseases), and the whims (futures) of the market.

[surfered]

6. And energy. Gasoline up. Natural gas up from 2.50 mcf to $4

Dollar down 2-3%

[bucolic_frolic]

3. Futures dropped on that news, and btw gold & silver brokeout this week

Gold up about 2.5% (back of mental envelope method), silver up north of 3%.

Trump's policies are trying to weaken the US dollar, and there it is as commodities spike in price (pay more worthless dollars for them).

End of quarter is Monday, and AI will likely tank until then, volatility will create surprises.

[Bernardo de La Paz]

4. These inflation figures are February, no tariff taxes. March will come out about April 28

By April 28, things will be 50% further into tRump regime 2.0.

[IronLionZion]

5. Tariffs next week should get those numbers up much higher

Make Anxiety Great Again

[Johnny2X2X]

7. Trumpflation is on the way

Who would have thought that raising prices on everything with tariffs would have the result of raising prices on everything?

[progree]

8. Graphs 3 month rolling average and month by month. Text still in progress

Just for a quick look at the graphs. I'm still working on the blah blah part

I'm not a big fan of the PCE, because it is a chained price index. It all boils down to is that it includes the effects of consumers switching to lower grade items, so, for example if in the face of high beef prices, consumers switch to chicken and beans, that lowers the reported meat and food PCE inflation numbers. (The reverse also happens too)

For that reason, I prefer the CPI, which has less of that.

But the PCE, especially the Core PCE, is what the Fed favors, so anyone trying to predict what the Fed might do needs to focus on the Core PCE, and not the CPI measures

The Fed favors the CORE measures for forecasting FUTURE inflation, as shown by analysis of the data.

I annualize them all to be easy to compare to each other, and to compare to the FED's 2% goal. I use the actual index values rather than the one-digit changes that are commonly reported in the media. Links to the data are with the graphs.

ALL the numbers are the seasonally adjusted ones


REGULAR ALL ITEMS PCE
BEA.gov News release: https://www.bea.gov/ and click on "Personal Income and Outlays" or "Personal Income"
https://fred.stlouisfed.org/series/PCEPI


CORE PCE:
https://fred.stlouisfed.org/series/PCEPILFE


REGULAR ALL ITEMS CPI (released 3/12/25)
https://www.bls.gov/news.release/cpi.nr0.htm
https://data.bls.gov/timeseries/CUSR0000SA0


CORE CPI (released 3/12/25):
http://data.bls.gov/timeseries/CUSR0000SA0L1E


LBN thread on CPI inflation, 3/12/25:
https://www.democraticunderground.com/10143416133

[progree]

9. In other econ news today: Consumer Sentiment final for February even worse than mid-month's reading

https://www.google.com/search?q=consumer+sentiment

Here's the CNBC one:
https://www.cnbc.com/2025/03/28/consumer-sentiment-worsens-as-inflation-fears-grow-university-of-michigan-survey-shows.html

Oh, as of 2:10 PM Central time (50 minutes before close)

S&P 500 down 1.9%

Dow down 1.6% (688 points)

[BumRushDaShow]

10. For the markets at the close

Dow = -715.80
NASDAQ = -481.04
S & P = -112.37

[progree]

11. S&P 500 closed Friday 3/28 at 5581, down 2.0% for the day, down 3.5% since election day, down 9.2% from ATH

and down 6.9% from the inauguration-eve level,

and down 5.1% year-to-date,

ATH is all-time high.

More at a thread I update every market day close for these statistics:
https://www.democraticunderground.com/111699775

[BumRushDaShow]

12. Monday will be the end of the quarter

so will see what happens. I still say they were all long overdue for corrections!

[progree]

14. Yes, they've been saying the market is overvalued since about 2012. I'm just not good at calling market

tops, so I stick with buy and hold a certain allocation between equities and fixed income (except to over-allocate more to a broad-based equity fund like a total market index fund when the S&P 500 has gone down more than 20%.) https://www.democraticunderground.com/111699922#post1

[BumRushDaShow]

15. I can kinda tell when it it is getting "bloated"

I remember years ago when some of my labby coworkers were also into the stocks, and a year or so after that '87 "crash", one of them said that he expected the Dow to eventually get to 4000 (that was when it was still in the 2000s). I laughed.

[wolfie001]

13. More bad news for the smelly orange slob

Will he lose more cult members? That's the question. First 2 months are the worse in US history. The other disasters, the country pulled together. Not this time.