U.S. personal consumption expenditures (PCE) inflation remained broadly unchanged between September and November, signaling that price pressures were stable — though still elevated — as the economy moved toward the end of 2025, according to data released by the Bureau of Economic Analysis.
In a report that included figures delayed by a recent U.S. government shutdown, the BEA said headline PCE prices rose 0.2% month over month in both October and November. On an annual basis, PCE inflation increased 2.7% in October and 2.8% in November. The core PCE index, which strips out volatile food and energy prices, advanced at the same pace in both months.
The Commerce Department’s data also showed that consumer spending remained resilient. Spending — which accounts for more than two-thirds of total U.S. economic activity — grew 0.5% in October and November, with the November increase matching economists’ expectations.
Personal income rose 0.3% month over month in November, slightly below forecasts of 0.4%, following a modest 0.1% increase in October.
Thursday’s data release also included updated core PCE figures for the July–September period, which showed inflation running at 2.9%, unchanged from earlier estimates.
Separate figures revealed that U.S. gross domestic product expanded at a 4.4% annualized rate in the third quarter, above the preliminary estimate of 4.3% and accelerating from 3.8% in the previous quarter. The BEA said the upward revision largely reflected stronger exports and business investment, partially offset by a downward revision to consumer spending.
Looking ahead, the Atlanta Federal Reserve forecasts GDP growth of 5.4% in the fourth quarter. Some economists argue that U.S. growth has become increasingly uneven, with higher-income households driving much of the expansion while lower- and middle-income consumers struggle with elevated living costs.
The Federal Reserve, which meets next week, closely monitors these inflation and growth indicators when setting interest rates. Policymakers are widely expected to leave rates unchanged at 3.5% to 3.75% following the conclusion of the January 28 meeting. The Fed cut borrowing costs multiple times late last year to support a softening labor market.
Labor market data released alongside the inflation figures showed fewer Americans filed new claims for unemployment benefits than expected. Initial jobless claims totaled 200,000 for the week ended January 17, up slightly from the prior week but below Wall Street forecasts of 209,000, according to the Labor Department.
The four-week moving average of claims fell to 201,500, the lowest level since January 2024, pointing to limited layoffs. Some economists say the labor market is characterized by both subdued hiring and restrained job cuts, as companies remain cautious amid trade and immigration policy uncertainty under Donald Trump.
Analysts also note that the rapid adoption of artificial intelligence — and the capital investment it requires — is prompting many firms to reassess workforce needs, contributing to slower hiring momentum.
