Fed’s Preferred Inflation Gauge Rose 3.0% in August

The Federal Reserve’s main inflation measure increased less than expected in August, according to the Commerce Department. The personal consumption expenditures price index rose 0.3% for the month and 3.4% from a year earlier, while the core reading, which excludes food and energy, rose 0.2% on the month and 3.0% annually. The report also showed stronger consumer spending than economists had forecast, even as income growth was weaker. Markets responded by reducing the odds of a rate hike at the Fed’s October meeting, though traders still saw a move later in the year as possible. The Commerce Department also revised secondquarter GDP growth higher to an annualized 2.2%, driven by stronger consumer and government spending and private investment. Inflation remained above the Fed’s 2% target, keeping policy decisions focused on whether price pressures are easing enough to slow further rate increases.