What the core PCE inflation rate measures
Core PCE inflation strips food and energy out of the Bureau of Economic Analysis’s PCE price index and measures how fast the remainder rose over twelve months. It combines the broad coverage of the PCE index with the trend-focused approach of a core measure, which is why Fed officials quote it more than any other inflation number.
How to read this chart
The line is smoother than headline PCE and turns slowly. Compare it with the 2% target: years spent below 2% were years of low interest rates, and the move above 5% in 2022 was the main justification for the fastest tightening cycle in four decades. A steady glide back toward 2% is what the Fed needs to see before cutting rates comfortably.
The latest reading in context
- At 3.1%, the latest reading is below its 5-year average of 3.8% and above its 10-year average of 2.8%.
- Of all 801 monthly readings since January 1960, 60% were lower than today’s and 40% were higher.
- Direction: up 0.1 points over the past month; unchanged over the past six months; up 0.3 points over the past year.
- The highest value on record is 10.2% (February 1975, 51 years ago); the lowest is 0.6% (July 2009, 17 years ago).
- The full history spans 9 US recessions, shaded grey on the chart.
Why it matters
FOMC statements, press conferences and the Summary of Economic Projections all frame the inflation outlook in terms of core PCE. Markets therefore treat its monthly release as a direct input into the expected path of interest rates.
What moves the core PCE inflation rate
- Housing services (smaller weight than in core CPI)
- Health care prices, including amounts paid by insurers and Medicare
- Financial services fees, which rise with stock prices
- Core goods prices tied to supply chains and the dollar
Key moments in its history
- 1975Peaked above 10%.
- 1996–2020Mostly between 1% and 2.5%, often below the Fed’s goal.
- 2022Reached about 5.5%, the highest since 1983.
Core PCE Inflation Rate data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 3.3% | 5.6% | 1.0% |
| 2010s | 1.6% | 2.1% | 1.1% |
| 2000s | 1.9% | 2.7% | 0.6% |
| 1990s | 2.4% | 4.4% | 1.0% |
| 1980s | 5.3% | 9.8% | 2.8% |
| 1970s | 5.9% | 10.2% | 2.7% |
| 1960s | 2.3% | 4.8% | 1.1% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Sep 2026 | 3.1% | +0.1 pts |
| Aug 2026 | 3.0% | 0.0 pts |
| Jul 2026 | 3.0% | 0.0 pts |
| Jun 2026 | 3.0% | −0.1 pts |
| May 2026 | 3.2% | +0.1 pts |
| Apr 2026 | 3.1% | 0.0 pts |
| Mar 2026 | 3.1% | +0.1 pts |
| Feb 2026 | 3.0% | 0.0 pts |
| Jan 2026 | 2.9% | +0.1 pts |
| Dec 2025 | 2.9% | +0.2 pts |
| Nov 2025 | 2.7% | 0.0 pts |
| Oct 2025 | 2.7% | −0.1 pts |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
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Core PCE Inflation Rate: questions and answers
Is core PCE the Fed's official target?
No. The official target is 2% for total (headline) PCE inflation. Core PCE is what the Fed watches as the best predictor of where headline inflation will settle.
Why is core PCE usually lower than core CPI?
Mainly because housing costs, which have risen fast, make up a much bigger share of core CPI than of core PCE, and because of the different index formulas.
How often is core PCE revised?
Each month’s figure is revised in the following releases and again in annual updates, as the BEA receives more complete data.
Where does the data on this chart come from?
From the U.S. Bureau of Economic Analysis. ChartWidgets downloads the series (PCEPILFE) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 1, 2026.