Fed's Preferred Inflation Gauge Rises in November Amid Higher Spending - CPI Data

The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) price index, increased in November 2025 as consumer spending rose. The core PCE index, excluding food and energy, climbed 0.3% month-over-month, up from 0.2% in October, according to data released January 22, 2026. Year-over-year, core PCE inflation accelerated to 2.8%, slightly above the Fed’s 2% target. The rise was driven by higher prices in services, particularly healthcare and housing, while goods inflation remained modest. Total personal consumption expenditures grew 0.4% in November, reflecting continued strength in household spending. The data suggest persistent inflationary pressures despite recent rate cuts, potentially complicating the Fed’s policy outlook. Markets reacted with muted volatility, with Treasury yields holding steady near 4.1%. The report adds pressure on policymakers to balance growth support with inflation control.