September personal consumption expenditures inflation index increased a seasonally adjusted 0.2%, according to a Thursday report from the Commerce Department's Bureau of Economic analysis. The annual adjusted PCE inflation rate was 2.1%. Food prices increased 0.4% while energy prices dropped by 2.0%. File photo by Michael Reynolds/EPA-EFE
Oct. 31 (UPI) -- The Federal Reserve's key inflation rate, the personal consumption expenditures price index, rose in line with expectations in September, the Commerce Department's Bureau of Economic analysis reported Thursday.
PCE increased a seasonally adjusted 0.2%, according to a Thursday report from the . The annual adjusted PCE inflation rate was 2.1%.
Both the monthly and the annual PCE rates met expectations of Dow Jones economists.
The BEA said the annual PCE inflation rate, excluding food and energy, was 2.7%.
"Prices for goods decreased 0.1% and prices for services increased 0.3%," the BEA said in a statement. "Food prices increased 0.4% and energy prices decreased 2.0%. Excluding food and energy, the PCE price index increased 0.3%."
From the same month a year ago, the PCE price index showed goods down 1.2% and services up by 3.7%. Food prices increased 1.2% from a year ago while energy prices fell 8.1%.
This report showing inflation close to the target goal of the Federal Reserve comes a week before the Fed is expected to approve another interest rate cut.
The cut would be in line with inflation very close to returning to the Fed's target of 2%.
The Thursday BEA report showed personal income up by $71.6 billion, or 0.3% at a monthly rate, matching expectations. Disposable personal income was up $57.4 billion or 0.3%.
Consumer spending measured by personal consumption expenditures increased by $105.8 billion in September, according to the BEA.
September's annual PCE inflation index used by the Fed as a benchmark was a bit lower than the 2.2% year-on-year August rate. The August results beat economists' expectations.