PCE Inflation Report Thursday: Core Revised to 3.0%, Fed Forecast Still at 3.4%
Thursday’s PCE inflation report for September starts from a lower base than first published, after the Bureau of Economic Analysis (BEA) cut July’s core rate from 3.3% to 3.0%. By our calculation, the Fed’s 3.4% core forecast for 2026, made before that revision, now needs a steady rise of about 0.33% a month, faster than any month since February.
The short answer. BEA publishes the September PCE price index on Thursday at 8:30 a.m. ET, after its annual update cut July’s core inflation rate to 3.0% from 3.3%. The Fed’s inflation goal is measured on this index, so it is the reading the Fed’s rate decisions aim at, and it lands the morning after the October decision. By our calculation, the Fed’s core forecast now takes a steady rise of about 0.33% a month from September, up from about 0.23% from August on the old data.
Where PCE inflation stands before the September report
On this page
What the latest PCE inflation report shows
The latest report, for August, put core PCE inflation at 3.0%, which is the yearly rise in prices without food and energy. BEA had first published a higher rate for July, and its annual update on September 30 brought July down to the same 3.0%.
BEA’s August report, released on September 30, put the PCE price index 3.4% above a year earlier. Core prices rose 3.0% over the year. Core leaves out food and energy, the prices that swing the most.
That same release carried BEA’s annual update of the national accounts, its yearly rework of the official record of US income, spending and prices. It revised personal income and outlays back to January 2021. A month earlier, the July report had put core at 3.3%, and the table below shows July before and after the update.
The order of the dates is what makes Thursday interesting. The Fed raised its target range on September 16, as our report on that decision covers, and the latest core PCE figure published at that point was July’s 3.3%. Fourteen days later BEA published the revised history. The release does not break down why the price figures moved.
| Reading | Headline PCE, yearly | Core PCE, yearly |
|---|---|---|
| July 2026, as first published (August 26) | 3.7% | 3.3% |
| July 2026, after the annual update (September 30) | 3.4% | 3.0% |
| August 2026 (September 30) | 3.4% | 3.0% |
Source: BEA, Personal Income and Outlays for July 2026 and August 2026, with the August historical comparisons table.
Core PCE inflation and the Fed’s 3.4% forecast
In September the Fed’s officials put core PCE inflation at 3.4% for 2026 as their middle forecast. On BEA’s revised numbers, our calculation says a steady core rise of about 0.33% a month from September to December would get there.
The Fed’s statement on its longer-run goals, reaffirmed in January 2026, sets the target as “inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures.” Its officials forecast on the same index.
The Fed’s September projections give 3.4% for core PCE inflation in 2026 and 3.7% for the headline rate. Its notes say both are fourth quarter to fourth quarter changes. So the 2026 figure compares October to December 2026 with the same three months of 2025, while the 3.0% core reading compares August with August a year before.
The officials wrote that forecast before the revision. On the data they had then, a steady core rise of about 0.23% a month from August would have matched it, by our calculation on the earlier figures. On the revised data the same forecast needs a quicker pace from September, and the headline forecast moved the same way, as the table shows. These are steady paths for comparison, so September alone need not reach them, and many uneven paths end in the same place.
| Fed September forecast for 2026 | Steady monthly rise needed, data before the revision (from August) | Steady monthly rise needed, revised data (from September) |
|---|---|---|
| Core PCE inflation, 3.4% | about 0.23% | about 0.33% |
| Headline PCE inflation, 3.7% | about 0.24% | about 0.32% |
Source: our calculation from BEA’s PCE price indexes before and after the September 30, 2026 update, on the Fed’s fourth quarter basis. Forecasts from the Fed’s September 2026 projections.
Core prices last rose 0.33% or more in a month in February. Over the summer, the year’s slowest stretch, they rose about 0.17% a month, against about 0.26% over January to August.
Kept up through December, that summer pace would put core near 2.9% on the Fed’s measure, our arithmetic shows.
Show the data
| Category | Value |
|---|---|
| Jan 2026 | 0.40% |
| Feb 2026 | 0.34% |
| Mar 2026 | 0.26% |
| Apr 2026 | 0.28% |
| May 2026 | 0.31% |
| Jun 2026 | 0.13% |
| Jul 2026 | 0.13% |
| Aug 2026 | 0.25% |
The gap between the forecast and the revised data says nothing about what officials will do with rates. The forecast stays as written for now. The Fed publishes projections at four meetings a year, and the next set comes with the December 8 to 9 meeting.
PCE inflation vs CPI inflation
Headline CPI jumped 0.6% in September, more than half of it from gasoline. In past months since 1991 when headline CPI rose that much, between 0.55% and 0.75%, headline PCE always rose less, by our count. Over a wider band it once rose more.
The Bureau of Labor Statistics (BLS) reported on October 14 that headline CPI rose 0.6% in September and 3.7% over the twelve months (BLS September CPI). Core CPI rose less, as the table shows.
| September 2026 CPI | From August | From a year earlier |
|---|---|---|
| Headline CPI | 0.6% | 3.7% |
| Core CPI (without food and energy) | 0.3% | 2.6% |
| Gasoline | 9.1% | 34.2% |
Source: BLS, Consumer Price Index, September 2026, released October 14, 2026; monthly changes with seasonal swings removed, yearly changes without that step.
Gasoline did most of the work. In the words of the BLS release, “The index for gasoline rose 9.1 percent in September, accounting for over half of the monthly all items increase.” Gasoline prices were 34.2% higher than a year earlier.
The headline PCE and CPI indexes price many of the same things, and BEA groups their differences into four kinds in an explainer on its site. PCE counts spending “by and on behalf of the personal sector,” which brings in spending the CPI leaves out (in BEA’s example from 2006, mostly hospital and nursing home services), while the CPI measures “out-of-pocket spending by households.” The two also weight items differently, and in that example housing and gasoline counted for more in the CPI.
Our reading is that this weighting helps a gasoline month lift headline CPI more than headline PCE. StockTitan’s macro data holds 17 months since January 1991 when headline CPI rose between 0.55% and 0.75% from the month before. Headline PCE rose less in all of them. It is a pattern with exceptions, since over a wider band of headline CPI rises of 0.5% or more, headline PCE rose more once, in March 2021.
Show the data
| Item | Headline CPI | Headline PCE | Change |
|---|---|---|---|
| Aug 2005 | 0.62% | 0.40% | -0.22 pts |
| Jan 2006 | 0.61% | 0.49% | -0.12 pts |
| May 2008 | 0.59% | 0.43% | -0.16 pts |
| Jul 2008 | 0.71% | 0.47% | -0.24 pts |
| Aug 2012 | 0.58% | 0.34% | -0.24 pts |
| Apr 2021 | 0.62% | 0.50% | -0.12 pts |
| May 2021 | 0.66% | 0.48% | -0.18 pts |
| Dec 2021 | 0.69% | 0.59% | -0.10 pts |
| Jan 2022 | 0.61% | 0.53% | -0.08 pts |
| Feb 2022 | 0.69% | 0.61% | -0.08 pts |
| Oct 2022 | 0.56% | 0.51% | -0.05 pts |
| Apr 2026 | 0.64% | 0.44% | -0.20 pts |
Core PCE inflation running above core CPI
Core prices tell the opposite story. Core PCE inflation has been above core CPI inflation for ten months, and by our count the August gap is the widest that way since June 2010.
Core PCE inflation has run above core CPI inflation in each of the ten months with data since November 2025 (our data holds no October 2025 CPI). That reverses the usual order, since core PCE inflation has averaged about half a point below core CPI inflation since 1960, by our calculation.
On our calculation, August’s gap was 0.56 point. Comparing the two yearly core rates month by month back to 1960, that is the widest with core PCE on top since June 2010.
Neither BEA nor BLS says in these releases which of the four kinds of difference is behind this year’s reversal.
Show the data
| Category | Core PCE | Core CPI |
|---|---|---|
| Jan 2025 | 2.8% | 3.3% |
| Feb 2025 | 2.8% | 3.1% |
| Mar 2025 | 2.6% | 2.8% |
| Apr 2025 | 2.7% | 2.8% |
| May 2025 | 2.8% | 2.8% |
| Jun 2025 | 2.8% | 2.9% |
| Jul 2025 | 2.8% | 3.1% |
| Aug 2025 | 2.9% | 3.1% |
| Sep 2025 | 2.8% | 3.0% |
| Nov 2025 | 2.7% | 2.6% |
| Dec 2025 | 2.9% | 2.6% |
| Jan 2026 | 2.9% | 2.5% |
| Feb 2026 | 3.0% | 2.5% |
| Mar 2026 | 3.1% | 2.6% |
| Apr 2026 | 3.1% | 2.7% |
| May 2026 | 3.2% | 2.8% |
| Jun 2026 | 3.0% | 2.6% |
| Jul 2026 | 3.0% | 2.5% |
| Aug 2026 | 3.0% | 2.4% |
What the September PCE inflation data would change
The yearly rate swaps September 2025 for September 2026, so it rises only when this September beats last September. By our calculation, the published core rate stays at 3.0% for any September rise from about 0.18% to about 0.27%.
On BEA’s revised index, core PCE rose 0.23% in September 2025 and headline PCE rose 0.29%. A September 2026 rise of the same size leaves the unrounded yearly rate where it is, and a bigger one lifts it.
Rounding blurs that line. BEA publishes one decimal, so the core rate only shows 3.1% once the monthly rise passes about 0.27%.
Show the data
| Assumed exact September 2026 rise | Core PCE, yearly | Headline PCE, yearly |
|---|---|---|
| 0.1% | about 2.9% | about 3.2% |
| 0.2% | about 3.0% | about 3.3% |
| 0.3% | about 3.1% | about 3.4% |
| 0.4% | about 3.2% | about 3.5% |
| 0.5% | about 3.3% | about 3.6% |
Source: our calculation from BEA’s revised PCE price indexes for August 2026 and September 2025; arithmetic only, never a forecast. For scale, August’s core rise worked out to 0.247% on the index and was published as 0.2%.
PCE inflation the day after the Fed decision
Thursday’s report is the first inflation reading the Fed gets after its October 28 decision. Its core figure is also the first of the four months that decide how the revised data compare with the Fed’s September forecast.
The Fed set its October decision for 2 p.m. ET on Wednesday, October 28, and our preview of that decision sets out what the Fed was weighing going in. Whatever it decides, the PCE figures cover the same month as the headline and core CPI readings officials already had. BEA’s advance estimate of third quarter GDP comes out in the same minute on Thursday, and StockTitan covers it in a separate article.
The Cleveland Fed’s inflation nowcast put September’s rise at 0.47% headline and 0.28% core in its October 28 update. The nowcast is a model estimate that the regional Fed bank updates each business day, and BEA’s figure on Thursday is the one that counts.
So the number to read on Thursday is the monthly core rise. A reading near the summer’s pace would leave the revised series further under the Fed’s September forecast, while one near the pace the forecast needs would keep up with it. Officials publish their own update in December.
What to watch
- Whether September core PCE rises faster than the summer’s pace: BEA’s September report, Thursday, October 29, 8:30 a.m. ET
- Whether core PCE inflation stays above core CPI inflation: the BLS October CPI on Tuesday, November 10, and BEA’s October report on Wednesday, November 25
- Whether officials change their 3.4% core forecast after the revision: the Federal Reserve’s projections at its December 8 to 9 meeting
Our numbers
- About 0.33% a month: the steady core PCE rise from September to December 2026 that matches the Fed’s 3.4% middle forecast, from BEA’s revised index on the Fed’s fourth-quarter basis
- About 0.23% a month: the same steady rise from August on the core figures published before the revision (for the 3.7% headline forecast, about 0.24% before and 0.32% after)
- About 0.17% and 0.26% a month: the average core PCE rise over June to August and over January to August 2026; the summer pace kept through December gives near 2.9% on the Fed’s basis
- Ten months and 0.56 point: core PCE inflation above core CPI inflation each month with data since November 2025; August’s gap is the widest that way since June 2010, in StockTitan’s macro data back to 1960
- 17 of 17: months since January 1991 when headline CPI rose 0.55% to 0.75% from the month before and headline PCE rose less, from the same data
- About 0.18% to 0.27%: the September core rises that keep the published core rate at 3.0%, from BEA’s revised index for August 2026 and September 2025
Frequently asked questions
What is PCE inflation?
It is the yearly change in the price index for personal consumption expenditures, which BEA builds from what households spend and what is spent on their behalf. The Fed’s 2% inflation goal is defined on it. In August 2026 it was 3.4%.
What is core PCE inflation?
Core PCE inflation is the same measure without food and energy, whose prices swing the most from month to month. It was 3.0% in August 2026, after BEA’s annual update lowered July’s first published 3.3% to 3.0%.
When does PCE inflation data come out?
BEA publishes it at 8:30 a.m. ET in its Personal Income and Outlays report. September’s figures come out on Thursday, October 29, 2026, and October’s on Wednesday, November 25.
Is PCE inflation higher than CPI inflation?
Usually core PCE runs below core CPI. By our calculation from indexes with seasonal swings removed, core PCE inflation has been the higher of the two since November 2025. In August BEA published 3.0% for core PCE and BLS 2.4% for core CPI. The headline rates were both 3.4% in August, and headline CPI rose to 3.7% in September.
Where can I find the official PCE inflation report?
BEA posts it on its PCE price index page at 8:30 a.m. ET on release day. StockTitan’s PCE price index page tracks each release with its history, and the economic calendar lists the next dates.
Sources
- StockTitan PCE price index page
- StockTitan economic calendar
- StockTitan: Fed rate decision preview, October 28, 2026
- StockTitan: Fed hikes to 3.75% to 4.00%, September 16, 2026
- BEA release schedule
- BEA, Personal Income and Outlays, August 2026
- BEA, Personal Income and Outlays, July 2026
- BEA, PCE price index
- BEA, differences between the PCE price index and the CPI
- BLS, Consumer Price Index, September 2026
- Federal Reserve, Summary of Economic Projections, September 2026
- Federal Reserve, meeting calendar
- Federal Reserve Bank of Cleveland, inflation nowcasting
- Federal Reserve, Statement on Longer-Run Goals and Monetary Policy Strategy
The information provided in this article is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or an endorsement of any particular investment strategy. Past performance does not guarantee future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.