PCE Inflation Hits 3.6% in September as Spending Outpaces Income

Inflation measured by the personal consumption expenditures price index ran at 3.6% in September from a year earlier, while household spending outpaced income growth and the saving rate stood at 3.8%, the Bureau of Economic Analysis reported Thursday.

The PCE price index climbed 0.5% from August, according to the BEA's personal income and outlays report for September. Excluding food and energy, the index rose 0.3% on the month and 3.1% from a year ago.

Spending ran ahead of income

Consumer spending in current dollars rose $113.1 billion, or 0.5%, in September. That included a $35.1 billion increase in spending on goods and a $78.1 billion increase on services, the BEA said.

Personal income grew more slowly, rising $54.5 billion, or 0.2%. Disposable personal income, which is income after personal current taxes, increased $52.7 billion, also 0.2%.

The income gain mainly reflected higher compensation and government social benefits. Private wages and salaries led the compensation increase, and Medicare led the rise in social benefits, according to the report.

Little real growth after inflation

Adjusted for inflation, the gains mostly disappeared. Real consumer spending rose just $2.6 billion, less than 0.1% at a monthly rate, after a 0.5% gain in August. Real disposable income fell 0.3%, following no change the month before.

Saving rate at 3.8%

Personal saving totaled $911.1 billion in September, and the personal saving rate, saving as a share of disposable income, was 3.8%, the BEA said. Personal outlays, which add interest payments and transfer payments to consumer spending, rose $113.0 billion.

By the numbers

• PCE prices: up 0.5% month over month, 3.6% year over year
• Core PCE prices: up 0.3% month over month, 3.1% year over year
• Personal income: up 0.2% ($54.5 billion)
• Consumer spending: up 0.5% ($113.1 billion)
• Real disposable income: down 0.3%
• Saving rate: 3.8%

The monthly price gain in September was larger than August's 0.3%, while the core measure matched August's 0.3% pace, according to the BEA's table of monthly changes.

The agency also revised July and August income estimates to reflect revised Bureau of Labor Statistics employment data. The October personal income and outlays report is scheduled for Nov. 25, 2026, at 8:30 a.m. EST.

Sources

1. U.S. Bureau of Economic Analysis, "Personal Income and Outlays, September 2026," released Oct. 29, 2026

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