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US Inflation Cools Below Estimates, Q2 GDP Growth Revised Higher
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CNBC TV18•30-09-2026, 19:19
US Inflation Cools Below Estimates, Q2 GDP Growth Revised Higher
- •The core Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation measure, rose 0.2% month-on-month in August, below the 0.3% estimate.
- •Annual core PCE inflation was 3%, also below the 3.3% expected, though both headline and core inflation remain above the Fed's 2% target.
- •Consumer spending climbed 0.9% in August, slightly above forecasts, indicating continued strength in demand despite easing inflation pressures.
- •The US economy's Q2 GDP growth was revised significantly higher to an annualized 2.2% from an earlier estimate of 1.5%, showing better performance than previously thought.
- •Strong consumer spending and business investment, particularly in AI-related areas, contributed to the upward revision in Q2 GDP, presenting a mixed picture for the Federal Reserve's interest rate decisions.
Key Questions Answered
The core personal consumption expenditures (PCE) price index rose 0.2% month-on-month in August, coming in below economists' estimate of 0.3%. Annually, core PCE inflation increased 3.0%, which was also below the expected 3.3%.
The Bureau of Economic Analysis revised its estimate of US economic growth for the April-June quarter to an annualised rate of 2.2%, up from the earlier estimate of 1.5%.
Energy prices were a key driver of the monthly increase in inflation during August, with gasoline prices climbing 4.4% and transportation services increasing 1.4%.
