US PCE Price Index (Dec 2025): Core Inflation Remains Sticky

Source: U.S. Bureau of Economic Analysis — Personal Income and Outlays, December 2025.

The December 2025 Personal Consumption Expenditures (PCE) Price Index showed continued modest inflation, with the core measure — which excludes food and energy — rising at a steady pace.

According to the U.S. Bureau of Economic Analysis, the PCE Price Index increased 0.3% month over month in December 2025, while Core PCE (ex food & energy) also rose 0.3% MoM. On a 12‑month basis, headline PCE remains near the mid‑2% range, with core slightly higher.

Core PCE is the Federal Reserve’s preferred inflation gauge, making this reading particularly relevant for policy expectations.

December 2025 Snapshot

• PCE Price Index (MoM): +0.3%
• Core PCE (MoM): +0.3%
• Disposable Personal Income (DPI): Increased
• Personal Outlays: Increased
• Personal Saving Rate: Slightly lower

Core Inflation Still Firm

The 0.3% monthly increase in core PCE suggests underlying price pressures remain persistent. While inflation has moderated from prior peaks, it has not fully returned to the Federal Reserve’s 2% objective.

The consistency of monthly core gains indicates services inflation remains an important driver.

Income vs. Spending Dynamic

The BEA report shows continued growth in disposable income alongside steady consumer outlays. However, the personal saving rate has edged lower in recent months.

When spending growth outpaces income growth, inflation pressures can remain elevated even without a surge in headline demand.

Market Implications

For equities, steady core inflation supports a “stable but not overheating” narrative.

For bond markets, a 0.3% core print reinforces expectations that policymakers will remain cautious rather than aggressively easing.

For the Federal Reserve, the report suggests inflation progress continues — but at a gradual pace.

Bottom Line

December’s PCE report shows core inflation holding steady at 0.3% month over month, while consumer spending remains firm and savings gradually soften.

The data reflects an economy that is stable, but where underlying inflation pressures have not fully dissipated.