PCE prices rose 0.3% in September and 0.3% in August, with the 12-month PCE inflation at 2.8% through September and core PCE also at 2.8% year over year.

The softer September inflation data reinforce expectations for a Federal Reserve rate cut at the December 9-10 meeting, even as tariffs keep overall inflation above target.

In September, personal income rose 0.4% and consumer spending increased 0.3%, with income slightly beating forecasts and spending a touch below.

The December meeting unfolds amid ongoing government shutdown uncertainty, which has delayed data collection and complicated the assessment of the economy and the Fed’s goals.

Fed policymakers remain divided on timing, but remarks from influential voices at the New York Fed and Governor Waller have boosted market bets on a December cut.

The December 16 government jobs report will provide more detail on November hiring and its implications for inflation and spending.

The official November jobs report is due on December 16, with forecasts pointing to a modest gain.

Markets broadly expect a rate cut next week, as policymakers weigh modest inflation progress against mixed growth and labor conditions.

Analysts expect the Fed to cut rates next week to stabilize the job market, with softer core inflation easing policy concerns.

ADP’s November report of 32,000 job losses raises concerns about further labor-market cooling and potential impact on consumer spending.

The economy features a blend of solid growth and higher unemployment (4.4%), weak home sales, and ongoing factory layoffs, but with AI data-center investment acting as a tailwind.

BEA has not announced a new date for October and November PCE inflation measures; BLS delayed October CPI data and postponed November data to December 18, after the Fed meeting.

Markets reacted with optimism that PCE data could justify a rate cut, though uncertainty remains due to data delays.

During the presidential campaign, rising purchasing power was highlighted, but tariffs since taking office have kept price pressures elevated.

One-year inflation expectations and personal-finance outlooks softened, with headline year-ahead inflation at 4.1%, the lowest since January.

Economy shows mixed signals: solid growth and spending countered by higher unemployment and job cuts, including a 32,000-job drop in November from ADP.

Despite some consumer improvements, households broadly feel that high prices remain a burden, tempering optimism.

The September report, delayed by the shutdown, aligned with expectations and supports the case for upcoming Fed rate cuts.

Analysts forecast Q3 GDP around 3.8% annualized, with BEA’s delayed Q3 GDP estimate due December 23.

Trump claims to have stalled inflation since January, signaling progress toward an “ideal level” but acknowledging more work remains.

University of Michigan sentiment improved modestly in early December, though gains are within the margin of error and overall sentiment remains somber.

Some services inflation remains elevated, signaling underlying inflation pressures that could worry policymakers despite softer overall inflation.

The Fed faces a balancing act: rate cuts could help with hiring and growth, but ongoing inflation pressures must be weighed.

Markets priced in a 25-basis-point cut at the upcoming Fed decision after the latest inflation readings.

Post-Thanksgiving online spending surged, with Adobe Analytics reporting a 7.7% year-over-year increase over the five-day period, hinting at Q4 upside.

Tariffs have gradually pushed up consumer prices as some firms pass along costs or draw down inventories.

The Fed views the PCE price index as its primary inflation gauge, with core PCE as the more stable signal of long-term trends.

Markets remain confident the Fed will cut rates by 25 basis points in December, with pricing supported by the inflation trajectory.

CME FedWatch shows roughly an 87% probability of a December quarter-point cut.

Spending growth points to a softer economy amid a weak labor market and higher living costs, though high-income gains helped earlier months.

The report supports easing expectations, potentially enabling a third rate cut if conditions stay favorable.

The Fed targets about 2% inflation via PCE core readings, a level not seen since 2021, shaping policy expectations.

The September data release was delayed by the government shutdown, interrupting data collection and reporting.

October and November job data will be released together after the December 9-10 meeting.