The official September PCE report recorded faster overall inflation and slower consumer spending compared with August.
| Economic Measure | August 2026 | September 2026 |
|---|---|---|
| Annual PCE inflation | 3.4% | 3.6% |
| Monthly PCE inflation | 0.3% | 0.5% |
| Annual core PCE inflation | 3.0% | 3.1% |
| Monthly core PCE inflation | 0.3% | 0.3% |
| Consumer spending growth | 0.9% | 0.5% |
| Real consumer spending growth | 0.5% | Less than 0.1% |
| Real disposable income growth | 0.0% | -0.3% |
| Personal saving rate | 4.1% | 3.8% |
August figures include revisions published with the September report. Real figures account for inflation.
Core PCE inflation, which excludes food and energy, remained at 0.3% for the month. The faster increase came in overall prices, rather than a new acceleration in monthly core inflation.
How Fast Are Consumer Prices Rising?
The rise means consumer prices were 3.6% higher than a year earlier. It doesn’t mean prices increased 3.6% during September alone.
Americans Spent $113 Billion More but Bought Barely More
Consumer spending increased by $113.1 billion in September, measured at a seasonally adjusted annual rate. Of that increase, $78.1 billion came from services and $35.1 billion from goods.
However, real spending increased by just $2.6 billion, less than 0.1%.
Americans were paying more, but the total amount purchased barely increased. Higher spending therefore wasn’t evidence of a major increase in demand.
For households already dealing with higher everyday living costs, the national figures help explain why spending more money doesn’t necessarily mean getting more for it.
Purchasing Power Fell as the Saving Rate Dropped
Personal income increased 0.2% in September. After taxes and inflation, however, disposable income fell 0.3%.
Disposable income is the money people have left after taxes. Real disposable income shows how much that money can buy after accounting for price increases.
The personal saving rate also declined from 4.1% in August to 3.8% in September.
The decline is consistent with the financial pressure facing American households. However, national figures cannot tell us how many individual families used savings or borrowed money to cover expenses.
Why Did Inflation Accelerate in September?
Energy prices contributed to the pressure. The September Consumer Price Index report showed gasoline prices increasing 9.1% during the month, compared with a 0.1% decline in grocery prices.
CPI and PCE use different methods, so those gasoline figures aren’t a precise breakdown of the PCE increase.
Both reports nevertheless showed faster overall inflation in September.
The Economy Grew, but Spending Weakened
Video: Scott Lincicome and Brooke Masters join Stephanie Ruhle to discuss U.S. GDP growth of 3.4% in Q3 and rising inflation.
The inflation report arrived alongside surprisingly healthy economic growth figures.
According to the third-quarter GDP report, the U.S. economy expanded at an annualized rate of 3.4%, compared with 2.2% in the previous quarter.
Consumer spending contributed to that quarterly growth, even though inflation-adjusted spending barely increased during September itself.
The two reports cover different periods. GDP measures activity across three months, while the September spending figures compare two individual months.
The Bottom Line
The Federal Reserve continues to face inflation above its 2% target alongside signs of weaker consumer spending.
The September report alone cannot predict the next interest rate decision. It does show that Americans finished the month paying higher prices without purchasing substantially more.
BEA will release October PCE inflation and consumer spending figures on November 25. Those results will show if September’s slowdown continued or if real spending recovered.
September’s figures remain subject to revision, including the spending and income estimates.
