Fed’s Favorite Inflation Measure Is Tame In Feb. Savings Rate At 3.1%. (charts, data downloads)

Overall Personal Consumption Expenditures, the Fed’s favorite measure of consumer inflation, were unchanged in February and 1.8% year-over-year through February. Excluding volatile oil and food costs from the readings, “Core” PCE price index for February was unchanged and 1.3% YOY through February. The Fed looks closely at Core PCE excluding food and energy prices because of the price volatility of these two items, and the Fed’s zone for reasonable inflation is 1-2% per year. At 1.3%, Core inflation is within their comfort zone, as confirmed by Ben Bernanke’s remarks last week that inflation is likely to be subdued for some time, and the fact that PCE inflation has been stable since summer 2009.

Personal income was unchanged in February after increasing 0.3% percent in January, and wages were also flat after increasing 0.4% in January. The household savings rate dropped from 4.8% in December to 3.1% for February. The 12 month average savings rate is 4.1% which is well below the May 2009 all-time record of 6.9%. Below are all key details from the Personal Income & Outlays report. You can automatically create charts and download historical PCE data by scrolling to our data section on the right side of the site, or visiting our Data page.