Inflation cooled two-tenths of a percentage point to 2.1% for the year ending in September, the Bureau of Economic Analysis reported Thursday in an update to the personal consumption expenditures index.
Inflation in the PCE index, which is the gauge favored by the Federal Reserve, is now clocking in at the lowest rate since February 2021, just after President Joe Biden took office. Thursday’s report, the last such update before the election, is good news for Vice President Kamala Harris, who is trying to convince voters that they won’t feel the pain of inflation under her presidency as they did under Biden.
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The consensus among economists was that PCE inflation would fall slightly from 2.2 to 2.1%.
From August to September, inflation rose 0.2%, about in line with forecast expectations.
Core PCE inflation, a measure of inflation that strips out volatile energy and food prices, remained at a 2.7% year-over-year rate.
PCE inflation is charting lower than the consumer price index, which is the most closely watched inflation gauge. The most recent reading of the CPI showed that inflation fell slightly to 2.4% for the year ending in July.
Any and all inflation data are big news as Tuesday approaches. Harris has taken the mantle from Biden, but is still being weighed down by the administration’s poor economic approval ratings.
Because of the high inflation, the Fed has been forced to hike interest rates to the highest level they have been since the dot-com bubble at the turn of the century. The higher rates have slowed the pace of inflation but have made it more unaffordable to take on debt and secure an auto loan or purchase a home.
In another economic report right ahead of the election, the Bureau of Economic Analysis announced on Wednesday that the economy grew at a 2.8% seasonally adjusted annual rate in the third quarter of this year.
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The headline growth rate is a number that Harris, who has been buffeted by economic headwinds, can tout on the campaign trail with less than a week until the election.
Friday will see the final employment report before the election. Harris and former President Donald Trump will both be hoping to use its data as campaign fodder as Americans head to the polls on Tuesday.