Fed’s Preferred Inflation Measure Comes in Much Lower Than Expected

The Fed’s preferred measure of inflation rose by much less than expected in August, data from the Commerce Department showed Wednesday.

The personal consumption expenditures price index climbed 3.4 percent over the past 12 months through August. Economists had forecast a 3.7 percent increase.

For the month, the PCE price index rose 0.3 percent, below the 0.4 percent increase forecast.

The prior month’s inflation data was revised down. July’s PCE index now shows a 0.1 percent monthly increase, down from 0.2 percent. The annual increase was revised down to 3.4 percent from 3.7 percent.

Excluding food and energy, so-called core PCE prices rose by 0.2 percent for the month and...