Fed's Inflation Fight Far from Over Despite Revised Data

The latest inflation data from the Bureau of Economic Analysis (BEA) shows that while inflation may look better on paper, it's still a concern for the Federal Reserve. Revised estimates lowered recent inflation rates without significantly changing the rapid growth in overall spending.

The Personal Consumption Expenditures Price Index (PCEPI), the Fed's preferred measure of inflation, rose 0.3 percent in August, up from 0.1 percent in July. Core PCEPI, which excludes volatile food and energy prices, increased 0.2 percent in August.

The BEA's revisions reflect new data and improved estimation methods. However, the trend remains a concern for the Fed. Nominal spending growth has exceeded 4 percent annually since early 2021 and is now at 6.3 percent over the past year.