Annual PCE Inflation Lower than Expected, Spending Up and Savings Down Slightly in August, Q2 GDP Increased

WASHINGTON, DC – Today, the Joint Economic Committee released its Monthly Expenditures Update for August. From July to August, headline personal consumption expenditures (PCE) price index inflation was 0.31 percent. Core PCE price index inflation, which excludes food and energy prices, remained flat from July at 0.25 percent.

In the same period, spending increased slightly while savings decreased. Real PCE increased by 0.55 percent, or $92.82 billion. Real PCE on all services increased by 0.20 percent, or $22.27 billion. Real PCE on all goods increased by 1.33 percent, or $76.44 billion. The nominal personal savings rate decreased by 0.5 percentage points to 4.1 percent.

From August 2025 to August 2026, headline PCE price index inflation was 3.42 percent, down from 3.70 percent in July and lower than expected, but remains higher than the Federal Reserve’s target of 2 percent. Core PCE price index inflation was 3.01 percent, also lower than projected.

Month-over-month, headline personal income increased by 0.24 percent, or $66.65 billion, while real disposable personal income per capita increased by 0.05 percent, which means that after tax income rose less quickly than prices.

For the full Monthly Expenditures Update, visit: https://www.jec.senate.gov/public/index.cfm/republicans/expenditures-update

Additionally, the Joint Economic Committee released its Gross Domestic Product (GDP) Update of Q2 2026, Third Estimate. Real GDP growth from 2026 Q1 to 2026 Q2 increased by 2.22 percent, up from the 2.09 percent in the first quarter. Current-dollar GDP increased by 8.49 percent or $656.756 billion, to a level of $32.563 trillion, the current size of the U.S. economy.

For the full GDP Update, visit: https://www.jec.senate.gov/public/index.cfm/republicans/gdp-update

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