Consumer Price Increases Slow, Matching Closer to Fed's Target – NMP Skip to main content

Consumer Price Increases Slow, Matching Closer to Fed's Target

Sep 29, 2023
stress
News Director

Core PCE Index's annual rise at 3.9% is the least in two years.

Commerce Department data released on Friday highlights a significant slowdown in consumer price increases as well as a deceleration in consumer spending. It also points to a possible halt on further rate hikes by the Fed.

The core Personal Consumption Expenditures (PCE) index, which omits gas and food prices and is a primary inflation metric for the Federal Reserve, recorded a 3.9% rise for the year leading up to August. This marks the smallest yearly surge in the past two years, aligning closer to the Fed's 2% inflation goal.

For the month, the core PCE witnessed a growth of 0.1%. Including the fluctuating energy and food sectors, the overall PCE index climbed 3.5% year-on-year and 0.4% from July. Though this is a slight increase from July's 3.3% annual and 0.2% monthly rates, it was largely anticipated due to the surge in gas prices.

Bill Bodnar, chief revenue officer for Tabrasa, said this is the type of number, coupled with pending home sales dipping 7.1% in August, meaning the Federal Reserve's Open Market Committee won't hike rates further in November. 

"I think the Fed has to sit on their hands," Bodnar said, adding these are numbers for August. "Can you imagine how bad September will be?"

"The numbers were so bad in August, inflation went higher, rates went higher, energy went higher, September's numbers will get bad print," Bodnar said. 

He said the Fed could use a potential federal government shutdown and the autoworker union strike as a reason for not raising rates, but those are just distractions. 

"They can't because the economy is slowing down," Bodnar said. 

About the author
Christine Stuart is the news director at NMP.
Published
Sep 29, 2023
Mortgage Rates Edge Down To 7.32%, Offering Limited Pipeline Relief

The modest decline trims borrower payments, while year-end forecasts above 7% leave LOs focused on deals already close to working

Oct 23, 2026
More Homebuyer Assistance Programs Skip Income Caps, Accept Repeat Buyers

DPR’s Q3 report identifies 311 programs without income limits and 1,080 without first-time buyer requirements, though funded availability grew more slowly than the overall count

Oct 23, 2026
Home Affordability Gap Persists Even With 20% Down

ATTOM puts the income needed to afford a median-priced home at $90,191 — roughly $10,700 above average wages, despite lower prices

Oct 23, 2026
More Buyers Expect Higher Rates. Fewer Would Wait.

Veterans United’s survey finds less willingness to hold out for lower rates, but little change in purchase timelines

Oct 22, 2026
Mortgage Rate Lock-In: More High-Rate Loans, Few Signs Of A Thaw

With 30-year rates above 7% and nearly half of outstanding loans below 4%, originators face a stubborn obstacle to rebuilding repeat-buyer pipelines

Oct 22, 2026
Investor Homebuying Slows, Small Buyers Claim Biggest Share In 15 Years

Smaller investors accounted for 66.2% of investor purchases in the first half of 2026 and relied on cash much less often than mega-investors

Oct 22, 2026