U.S. PCE Inflation Keeps Steady in November

U.S. inflation showed little change in November, reinforcing expectations that the Federal Reserve can maintain a cautious policy stance into 2026.

The Personal Consumption Expenditures (PCE) Price Index rose 0.2% month over month, matching October’s pace and market forecasts. The data point to a gradual cooling in price pressures rather than any renewed acceleration.

Core Inflation Remains Well Behaved

Underlying inflation trends stayed stable, with the core PCE index, which excludes food and energy, also rising 0.2% on the month. Movements within major categories were mixed:

• Goods prices rebounded by 0.2% after a decline in October
• Services inflation eased to 0.2% from 0.3%
• Food prices were unchanged
• Energy prices jumped 1.9% after falling 0.7% previously

The increase in energy costs reflected volatility in global energy markets, though it did not alter the broader inflation trend.

Annual Readings Support a Patient Fed

On a year-over-year basis, headline PCE inflation edged up to 2.8% from 2.7%, while core PCE also ticked higher to 2.8%, in line with expectations. Although inflation remains above the Fed’s 2% target, the steady pace suggests it is moving in an orderly and predictable range.

With wages, consumer demand, and supply chains showing signs of stabilization, the November report offers reassurance that inflation is neither reaccelerating nor cooling abruptly. Markets are now looking ahead to upcoming Federal Reserve communications for clearer guidance on the timing and direction of future policy decisions.