This story about the March 2026 PCE inflation is developing and will be updated with more details.
The Federal Reserve’s preferred inflation gauge remained stubbornly high in March as consumers continued to face elevated price growth.
The Commerce Department on Thursday reported that the personal consumption expenditures (PCE) index rose 0.7% on a monthly basis in March and is up 3.5% from a year ago. Both figures were in-line with the expectations of economists polled by LSEG.
Core PCE, which excludes volatile measurements of food and energy prices, was up 0.3% from a month ago and increased 3.2% year over year. Both figures were in line with economists’ expectations from the LSEG poll.
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Federal Reserve policymakers are focused on the PCE headline figure as they try to bring inflation back to their long-run target of 2%, though they view core data as a better indicator of inflation. Compared with February’s annual readings, headline PCE rose from 2.8% to 3.5% in March, while core PCE increased from 3% to 3.2%.
Goods prices were up 0.7% in March compared with a year ago, and increased 1.4% on a monthly basis.
Services prices rose 2.8% compared with last year in March, and were up 0.3% on a monthly basis.
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The personal savings rate as a percentage of disposable personal income was 3.6%, down from 3.9% in February and 4.5% in January.
Since the start of 2025, the personal savings rate has declined from 5.1% in January 2025 and a recent peak of 5.5% last April.
What experts are saying
Heather Long, chief economist at Navy Federal Credit Union, said that while the “stock market and economy are being held up mainly by the big surge in AI investment,” the inflation
“Meanwhile, on Main Street, people are hurting from the highest inflation in three years and gas prices back at $4.30. Households are paying about $70 more a month at the pump. Nearly half of the larger tax refunds have already gone to pay for higher gas prices for many families,” Long said. “The only encouraging news is layoffs remain low. But it’s a big warning sign that consumption has slowed to just 1.6% in the first quarter.”
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Bret Kenwell, U.S. investment analyst at eToro, said that, “Headline PCE was in-line with expectations, but that doesn’t soften the blow very much.”
“It still marked the highest year-over-year reading in almost three years, while goods inflation remains a clear pressure point. Durable goods inflation has gone from deflationary to inflationary since May 2025 and continues to accelerate, while non-durable goods inflation jumped as rising energy costs worked their way through the report,” Kenwell explained.
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