PCE: U.S. consumer prices rose 2.6% in December

Consumer prices, a gauge closely watched by the Federal Reserve, rose in December in line with analysts' expectations, the Bureau of Economic Analysis said Friday.

The personal consumption expenditures index rose 2.6% in December. Core PCE, omitting food and energy, was 2.8%.

The December monthly increase was .07%, bringing the annual core PCE inflation rate to 2.8%.

The BEA reported U.S. personal income was up $92 billion, increasing by a 0.4% monthly rate in December.

Personal saving for December was $843.2 billion, while the personal saving rate expressed as a percentage of disposable personal income was 3.8%.

The PCE inflation rate met expectations of the Dow Jones economic estimate, while the Fed's target inflation goal remains 2%.

In remarks Friday at the New England CEO Summit in Portsmouth, New Hampshire, Fed Governor Michelle Bowman said she wants to see more progress toward lowering inflation to 2% before approving any more interest rate cuts.

"I would like to see progress in lowering inflation resume before we make further adjustments to the target range," Bowman said. "We need to keep inflation in focus while the labor market appears to be in balance and the unemployment rate continues to be at historically low levels."

She added that the U.S. economy remained strong through the end of 2024 "with solid growth in economic activity and a labor market near full employment."

She said she expects inflation to moderate further in 2025.