From the preceding month, the PCE price index for October increased less than 0.1 percent (table 5). Prices for goods decreased 0.3 percent and prices for services increased 0.2 percent. Food prices increased 0.2 percent and energy prices decreased 2.6 percent. Excluding food and energy, the PCE price index increased 0.2 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.

From the same month one year ago, the PCE price index for October increased 3.0 percent (table 7). Prices for goods increased 0.2 percent and prices for services increased 4.4 percent. Food prices increased 2.4 percent and energy prices decreased 4.8 percent. Excluding food and energy, the PCE price index increased 3.5 percent from one year ago.

Real PCE

The 0.2 percent increase in real PCE in October reflected an increase of 0.2 percent in spending on services and an increase of 0.1 percent in spending on goods (table 4). Within services, the largest contributors to the increase were other services (led by international travel), health care (led by hospital and nursing home services), and food services and accommodations (led by accommodations). Within goods, the largest contributor to the increase was gasoline and other energy goods. Detailed information on monthly real PCE spending can be found on Table 2.4.6U.

[This is somewhat better than last month’s 3.4% overall and 3.7% core PCE rate, but not by much. It’s still above the Fed’s 2.0% target, and it doesn’t appear to be going down sharply. It’s probably enough of an improvement to avoid another rate hike for now, but the Fed will likely take some action if the next month’s report doesn’t finally see the price inflation index getting below the 3% line. — Ed]