Fed’s favorite Inflation gauge showed price growth picked up in December

The Federal Reserve’s preferred inflation gauge showed prices rose as expected in December, and it remains above the central bank’s target level amid its ongoing efforts to wrestle down inflation.

The Commerce Department on Friday reported that the personal consumption expenditures (PCE) index was up 0.3% from the prior month and 2.6% on an annual basis. Those figures were in line with the estimates of economists polled by LSEG.

Core PCE, which excludes volatile food and energy prices, rose 0.2% for the month and increased 2.8% from a year ago, in line with estimates.

Federal Reserve policymakers are focusing on the PCE headline figure as they try to slow the pace of price increases to their target of 2%, though they view core data as a better indicator of inflation. Headline PCE ticked higher from an annual rate of 2.4% in November to 2.6% last month, while core PCE has been at 2.8% for three consecutive months.

This is a developing story. Please check back for updates.