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PCE Estimates Hold Steady After CPI; September Fed Path Unclear
August core PCE estimates cluster near +0.2% after CPI. Pantheon sees a 3.2% annual rate. But September jobs, PPI, and CPI all drop before the Sept 16-17 FOMC meeting.
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The August CPI print landed Thursday, but the Federal Reserve's preferred inflation gauge is the PCE price index, not the CPI. The Bureau of Economic Analysis builds the PCE using a mix of consumer and producer price data, alongside other source inputs. A CPI reading alone does not settle the inflation picture.
Economists are already making preliminary estimates for the August core PCE, published by the BEA later this month. Early projections cluster around a 0.16% to 0.23% monthly increase, according to several bank models shared with clients Thursday.
Pantheon Macroeconomics, a closely watched forecaster, estimates the August core PCE at +0.16%. That would pull the annual rate down to 3.2% from 3.3%, Pantheon said in a note. The firm added that such a reading "would be enough to keep the Fed on hold in September."
The September Federal Open Market Committee meeting is scheduled for Sept. 16-17. Before that, the Bureau of Labor Statistics releases the August producer price index on Sept. 10 and the August CPI on Sept. 11. The August jobs report lands Sept. 4.