Fed’s preferred gauge showed core inflation at 3.0% in August, much lighter than expected

Consumer prices posted a smaller than expected increase from a year ago, according to the Federal Reserve's primary inflation gauge, the Commerce Department reported Wednesday. The personal consumption expenditures price index increased a seasonally adjusted 0.3% for the month, putting the 12-month gain at 3.4%. Economists surveyed by Dow Jones had been looking for increases of 0.3% and 3.7% respectively. Excluding food and energy, PCE posted a 0.2% increase that put the annual core level at 3%. The respective forecasts were for 0.3% and 3.3%. Though the Fed officially follows the headline PCE number, officials generally consider core a better gauge of longer-term trends. While the annual increases were less than expected, they came as the Bureau of Economic Analysis adjusted the way it computes several components of the index. It was not immediately clear what impact the revisions had on the final numbers. This is breaking news. Please refresh for updates.