Inflation Is in Services despite Powell’s Denials: PCE Price Index for Core Services Accelerated Further. Durable Goods Prices Fell for 2nd Month

By Wolf Richter –  WOLF STREET

Inflation is in services, where it accelerated further, even in the inflation index that the Fed prefers, the PCE Price Index released today by the Bureau of Economic Analysis, though Powell has been denying it in recent speeches, blaming instead imported goods and tariffs for the current inflation impetus. But the PCE price index for durable goods, many of which are tariffed, fell (negative readings) in August for the second month in a row, while inflation in services, which are not tariffed, accelerated further.

Both the overall PCE price index and the core PCE price index accelerated further year-over-year, and their increases (+2.7% and +2.9%) are now worse than a year ago.