Core PCE Inflation at 3.0%, Below Estimate; Q2 GDP Growth 2.2%
Core PCE prices rose 3.0% year over year in August, below the 3.3% estimate, and second-quarter GDP growth was 2.2% on September 30.
A heavy slate of U.S. data on Wednesday, September 30, 2026, showed inflation below forecasts and growth above them. The core PCE price index rose 3.0% year over year in August, compared with a 3.3% estimate and 3.0% previously. On a monthly basis, core PCE increased 0.2%, against an expected 0.3%. Headline PCE prices rose 3.4% from a year earlier, below the 3.7% estimate, and 0.3% from the prior month.
Second-quarter GDP grew at a 2.2% rate, above the 1.5% estimate and below the prior 2.5%. The GDP price index was 6.1%, compared with an estimate of 6.4%. Corporate profits rose 7.7% quarter over quarter, short of the 8.2% forecast.
Household figures were mixed. Personal spending rose 0.9% in August, above the 0.8% estimate, while personal income increased 0.2%, half the expected 0.4%. ADP private employment rose by 90 thousand in September, above the 70 thousand forecast. The Chicago PMI was 58.8, far above the 51.2 estimate. The goods trade deficit widened to $132.6 billion, against a forecast of $115 billion.
In housing finance, the MBA 30-year mortgage rate rose to 7.3% from 7.12%, and mortgage applications fell 6%.
FRED data showed the 10-year yield at 5.29% and the 2-year at 4.88%, a spread of 41 basis points. The effective fed funds rate was 3.88%, the VIX 16.34 and the high-yield option-adjusted spread 3.12 percentage points. A WSJ headline read "Fed's Kashkari Says Inflation Still Too High, Latest Data Didn't Change View."
Data
| Release | Actual | Estimate | Previous |
|---|---|---|---|
| Core PCE Price Index YoY (Aug) | 3.0% | 3.3% | 3.0% |
| Core PCE Price Index MoM (Aug) | 0.2% | 0.3% | 0.1% |
| PCE Price Index YoY (Aug) | 3.4% | 3.7% | 3.4% |
| GDP Growth Rate QoQ (Q2) | 2.2% | 1.5% | 2.5% |
| Personal Spending MoM (Aug) | 0.9% | 0.8% | 0.1% |
| ADP Employment Change (Sep) | 90K | 70K | 36K |
| Chicago PMI (Sep) | 58.8 | 51.2 | 47.1 |
| 10-year Treasury (FRED) | 5.29% |
Data: FMP, FRED. Figures are close-to-close unless stated.
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