August PCE Report Due Wednesday With Inflation Forecast at 3.7%

The Bureau of Economic Analysis (BEA) will release its August Personal Income and Outlays report Wednesday, with inflation forecasts above the Federal Reserve’s 2% goal and spending expected to remain solid.

The report is scheduled for 8:30 a.m. ET (12:30 p.m. UTC) on Sept. 30. It will include the personal consumption expenditures price index, the Fed’s preferred inflation measure, along with personal income and consumer spending data.

Forecasts call for headline and core PCE inflation to rise 0.3% from July. Annual inflation is expected to hold at 3.7% for headline PCE and 3.3% for core PCE, which excludes food and energy.

Consumer spending is forecast to increase 0.8% in August, compared with a 0.2% gain in July. In July, headline PCE inflation rose 3.7% from a year earlier, while core PCE inflation increased 3.3%. Both measures climbed 0.2% from June.

The release will follow the Federal Open Market Committee’s decision to raise the federal funds target range by 25 basis points on Sept. 16, bringing it to 3.75% to 4%. The committee said, “Inflation remains elevated.”

The Fed’s September projections placed median 2026 headline PCE inflation at 3.7% and core PCE inflation at 3.4%. Officials continued to project 2% inflation over the longer run.

The BEA’s annual update will also revise national economic accounts and incorporate updated monthly estimates for August. Those changes will be considered alongside the inflation, income and spending figures.

A hotter reading could reinforce expectations for additional rate increases and pressure valuations across crypto and other risk assets. A softer reading could reduce that pressure, while the spending data and revisions may influence the broader market interpretation.

Dan North, senior economist at Allianz Trade, said, “There’s little indication that inflation is going to abate anytime soon.”

Federal Reserve Chairman Kevin Warsh said, “I would be hard pressed to describe broad financial conditions as restrictive.”

The August Personal Income and Outlays report is due Wednesday at 8:30 a.m. ET.