Hmmm: PCE Inflation Accelerated in January - While Consumer Spending Dropped

From the preceding month, the PCE price index for January increased 0.3 percent (table 5). Prices for services increased 0.6 percent and prices for goods decreased 0.2 percent. Food prices increased 0.5 percent and energy prices decreased 1.4 percent. Excluding food and energy, the PCE price index increased 0.4 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 January increased 2.4 percent (table 7). Prices for services increased 3.9 percent and prices for goods decreased 0.5 percent. Food prices increased 1.4 percent and energy prices decreased 4.9 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.

The 0.1 percent decrease in real PCE in January reflected a decrease of 1.1 percent in spending on goods and an increase of 0.4 percent in spending on services (table 4). Within goods, decreases were widespread, led by motor vehicles and parts (mainly new light trucks). Within services, the largest contributor to the increase was housing and utilities (led by utilities).