Sept. 30 (UPI) — Core inflation, the key economic measure preferred by the Federal Reserve, rose by 3% in August on an annual basis, the Bureau of Economic Analysis reported Wednesday.
The core inflation marker, which excludes volatile food and energy, rose by 0.2% for the 12 months ending in August. The overall personal consumption expenditures index marked a 3.4% annual increase and a 0.3% bump for the month.
Wednesday’s report on annual inflation comes in cooler than expected. The Dow Jones consensus estimate forecasted a 3.7% increase in the personal consumption index for the year ending in August and a 0.3% increase for the month.
The August report differs from past reports as the Bureau of Economic Analysis implemented new ways of calculating several areas of the report. It announced this new methodology in July to take effect on Wednesday.
Changes to the methodology includes the way portfolio management fees and prices for legal services and computer software are measured. The impact of these changes on Wednesday’s report are not readily apparent.
Personal incomes increased by 0.2% in August while spending climbed by 0.9%. The personal saving rate, measured as a percentage of disposable personal income, was 4.1%.
Gasoline and energy prices were again a driving force in inflation in August. Spending on gas and energy goods increased by $20.9 billion, trailing only other nondurable goods for the steepest acceleration in spending for the month.
Other nondurable goods spending increased by $24.7 billion.
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