Core inflation held above the Federal Reserve’s target before the recent surge in energy prices, according to a key gauge released Thursday that offers the central bank a snapshot of conditions leading into the Iran war.
The core personal consumption expenditures price index, which excludes food and energy, rose a seasonally adjusted 3% in February, the Commerce Department reported. The all-items headline inflation measure increased 2.8%.
Both readings were in line with the Dow Jones consensus. The core annual inflation rate was 0.1 percentage point lower than in January while headline was unchanged.
On a monthly basis, both core and headline prices rose 0.4%, also meeting forecasts.
The Fed uses the PCE price index as its primary yardstick and forecasting tool for inflation. The Fed, which targets 2% inflation, sees core as a better indicator of longer-term trends.
