PCE inflation December 2025:

Inflation remained solid while economic growth cooled toward the end of 2025, data released Friday showed that could complicate the Fed’s interest rate path.

According to figures released by the Ministry of Commerce on Friday, gross domestic product increased by only 1.4% on an annual basis. Economists surveyed by Dow Jones had expected a 2.5 percent gain.

For all of 2025, the US economy grew by 2.2%, down from 2.8% in 2024.

At the same time, inflation remained strong in December, according to the indicator most closely followed by Fed officials.

The core personal consumption expenditures price index, which excludes food and energy, rose 3% in December, according to a separate statement. That matched the consensus forecast but kept the key inflation gauge well above the Fed’s 2% target.

On a headline basis, the PCE index accelerated 2.9%, or 0.1 point higher than expected.

Both indexes rose 0.4% for the month, compared to forecasts of 0.3%.

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