U.S. August PCE Rises 3.4%... Q2 Growth Rate Revised Up to 2.2%

by Hwang Yoonju

Published 30 Sep.2026 22:56(KST)

PCE inflation falls short of 3.7% market forecast

Second-quarter GDP revised up by 0.7 percentage points over preliminary estimate

In August, the U.S. Personal Consumption Expenditures (PCE) inflation rate came in below market expectations, while the country's economic growth rate for the second quarter of this year was revised upward. Although the inflation rate still exceeded the Federal Reserve's 2% target, the U.S. economy showed stronger growth than initially recorded.

A worker is arranging products at a supermarket located in New York. New York (USA) - Photo by Yoonju Hwang

On September 30 (local time), the U.S. Department of Commerce announced that the PCE price index for August rose 3.4% compared to the same month last year. This figure is below the 3.7% forecast compiled by Dow Jones. On a month-over-month basis, the index increased by 0.3%, which matched expectations.

Excluding the more volatile food and energy sectors, the core PCE price index was up 3.0% year-on-year and 0.2% month-over-month.

The PCE price index reflects the price changes of goods and services consumed by households. The Federal Reserve uses the PCE price index as a benchmark to determine whether its monetary policy target of 2% inflation is being achieved.

The final figure for the real Gross Domestic Product (GDP) growth rate in the second quarter of this year, also released on the same day, was calculated at an annualized rate of 2.2% compared with the previous quarter. This is 0.7 percentage points higher than the preliminary estimate of 1.5% announced last month, and it also exceeds the market forecast of 1.5%.

The Department of Commerce explained that upward revisions to investment, consumer spending, and government spending were the main contributors to the adjusted growth rate.