Fed's favored inflation gauge shows consumer prices remained elevated in August

Core Inflation Data - The personal consumption expenditures (PCE) index rose 0.3% in August from the previous month and is up 2.7% year-over-year, aligning with economists' estimates [1] - Core PCE, excluding food and energy prices, increased by 0.2% month-over-month and 2.9% year-over-year, also meeting expectations [2] - Headline PCE increased from 2.6% in July to 2.7% in August, while core PCE remained steady at 2.9% during the same period [2] Price Trends - Prices for goods rose by 0.9% in August compared to the previous year, an increase from 0.6% in both June and July [3] - Durable goods prices were up 1.2% year-over-year, while nondurable goods also rose by 1.2% [3] - Services prices increased by 3.6% in August compared to a year ago, slightly higher than the 3.5% increase in July [3] Personal Savings Rate - The personal savings rate as a percentage of disposable personal income was 4.6% in August, down from 4.8% in the prior month [4] Federal Reserve Actions - The Federal Reserve cut interest rates for the first time this year by 25 basis points, despite inflation remaining above the 2% target [5][7] - Federal Reserve Chair Jerome Powell indicated that tariff-induced price hikes could either be a one-time shift or a persistent inflationary challenge, affecting inflation data [8] - Powell noted that the increase in goods prices is a significant contributor to the overall inflation increase this year, although these effects are currently small [9]