US PCE inflation reaches 3.6% in September as real spending stalls

Serguey Asael Shinder31 October 2026, 10:431 min read

The inflation gauge the Federal Reserve targets rose to 3.6% year on year in September, according to the Bureau of Economic Analysis release of 29 October. The price index for personal consumption expenditures increased 0.5% from August; excluding food and energy, it rose 0.3% in the month and 3.1% from a year earlier.

The same release shows households running to stand still. Personal income rose $54.5 billion, or 0.2%, mainly from wages and salaries and Medicare-led social benefits, and disposable income also rose 0.2%. Spending grew faster, by $113.1 billion or 0.5%, split between $35.1 billion on goods and $78.1 billion on services. After prices, real spending rose by just $2.6 billion, less than 0.1%, and real disposable income fell 0.3%, after no change in August. The personal saving rate was 3.8%, with saving at $911.1 billion.

The month-by-month table makes the shift visible: in August, real spending had risen 0.5% with prices up 0.3%; in September, prices rose 0.5% and real spending did not grow. Estimates for July and August were revised with new employment data. The next release, for October, is scheduled for 25 November.

What it means

The quarterly GDP report published the same morning showed strong growth for the third quarter as a whole; the monthly detail shows how the quarter ended, with energy-driven price gains absorbing all the growth in nominal spending. For the Fed, which held rates on 29 October with two dissents in favour of a hike, a core rate of 3.1% and a headline rate of 3.6% are the numbers that keep the tightening argument alive, while flat real consumption and a low saving rate argue that households have little room left.