December PCE Data Confirms Inflation Persistence Amid Slowing Growth

The latest BEA data shows the PCE price index rising 0.3% month-over-month, holding steady at 2.8% year-over-year. Core PCE, the Fed’s preferred inflation gauge excluding food and energy, also climbed 0.3% for the month and remains elevated at 2.9% annually. Inflation stubbornly stays above the Fed’s 2% target, highlighting persistent price pressures despite some easing in headline rates.

Personal income rose 0.3% month-over-month as expected, signaling steady wage growth, while personal spending grew 0.4%, slightly slower but still supporting consumer activity amid rising costs and cautious sentiment.

Paired with Q4 GDP data showing a slowdown to roughly 2.3% annualized growth, the economic picture is clear: growth is moderating, inflation remains sticky, and consumers are spending, just more cautiously.

For the Federal Reserve, this reinforces a “higher-for-longer” interest rate stance. Markets and Treasury yields will be watching closely for any signs of easing inflation or sharper growth deceleration that could shift policy expectations.

In this environment, defensive equities and real assets like gold and oil may continue to attract attention, especially as geopolitical risks keep inflation pressures elevated.

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