The personal consumption expenditures (PCE) index increased by 4.4% annually in December 2022, slightly less than the 4.7% annual increase in November 2022.
The PCE increased by 0.3% on a monthly basis during December.
The Fed continues to monitor the impact of interest rate hikes on the PCE index, which tracks consumer spending, especially given that inflation has been slowing down recently. The sliding PCE gives a strong indicator of where inflation is heading as it strips out volatile commodity prices.
The Fed is set to announce interest rates this upcoming Wednesday.