The US Personal Consumption Expenditures (PCE) price index rose by 0.3% month-over-month in February 2025, maintaining the same pace as the previous two months and aligning with expectations. Prices for goods increased by 0.2%, slower than the 0.5% rise in January, while prices for services grew by 0.4%, higher than the 0.2% rise seen in the prior month.
US PCE prices rise the most in over a year
The core PCE index, which excludes volatile food and energy prices, climbed 0.4%, the largest increase since January 2024, surpassing both the 0.3% rise in January and the expected 0.3%. Food prices remained steady (compared to 0.3% in January), while energy prices, both for goods and services, rose by 0.1%, after a sharp 1.3% increase in January. On a year-over-year basis, PCE prices increased by 2.5%, matching January's rate and expectations, while the core annual rate rose to 2.8%, above the upwardly revised 2.7% and the forecast of 2.7%.
US personal income increase
US personal income increased by 0.8% month-over-month, reaching $25.442 trillion in February 2025, marking the largest rise in over a year. This was an improvement from the revised 0.7% increase in January and exceeded market expectations of a 0.4% gain. Employee compensation rose by 0.5%, driven by strong wage growth (0.4%) and additional wage supplements (0.5%). Rental income, adjusted for capital consumption, surged by 0.9%. Personal income receipts from assets rose by 0.4%, primarily due to a 0.5% increase in interest income and a 0.2% rise in dividend income. Meanwhile, disposable personal income climbed by $191.6 billion, or 0.9%, to $22,301 trillion.
Core figures
The core PCE price index, which excludes food and energy prices, rose by 0.4% month-over-month in February 2025, marking the largest increase since January 2024. This was higher than the 0.3% forecast and up from the 0.3% rise in January. Annually, core PCE inflation increased to 2.8%, surpassing market expectations of 2.7%.
